Two separate but equally important technology agendas-fostered by the Federal Communications Commission and Cable Television Laboratories Inc.-are having an enormous impact on the cable industry as it navigates a period of intensifying competition.
The FCC has a vast open agenda that far exceeds that of CableLabs in scope and complexity. CableLabs-which has its roots in a small and limited pool of members-can only serve as an ad hoc unifying force when it comes to identifying and crafting industrywide specifications.
In many respects, CableLabs has always enjoyed a far more self-contained and manageable agenda than the FCC.
The cable industry has already demonstrated, via its immensely successful Data Over Cable Service Interface Specification program, an ability to unite and work toward a common goal in lockstep with the consumer-electronics sector. With 44 companies now producing DOCSIS modems, CableLabs has succeeded in demonstrating that it can create an environment where such activity can happen.
For the FCC, the agenda includes digital-television compatibility and digital must-carry-initiatives that have been well defined for months. But the road is much less smooth.
And as far as the National Cable Television Association is concerned, the whole digital must-carry issue can be summed up today in one quick statement.
"The FCC has made no decision. Chairman [William] Kennard has been clear and consistent that the burden is on the broadcasters to show need for multiple must-carry, and they have not done so. Nobody argues with the idea that their primary signal will be carried," NCTA spokesman David Beckwith said.
Others contended that digital must-carry is not only contentious, but unnecessary.
"Digital must-carry is a highly charged political issue, which is forcing something to happen that would not have happened if this was a consumer-driven phenomenon," industry consultant Walter Ciciora said. "And to top it off, what we are heading for is not HDTV [high-definition television], but SDTV [standard-definition television], which stands for 'same dumb television.'"
Mark Schubin, a New York-based technology consultant, said a gigantic cultural shift is under way in the cable industry.
"The shift to DTV represents much less of a cultural shift than the rollout of PODs [point-of-deployment security modules] by the cable industry," Schubin said. "Besides, if Sinclair Broadcast [Group] prevails in its efforts to have frequency-division multiplexing] accepted as a modulation standard side-by-side with 8-VSB [vestigial sideband], cable will be in a much better position. They may not have to worry about must-carry. It could take the heat off."
Over at CableLabs, the major initiatives-ongoing work on cable modems and the impending introduction of DOCSIS 1.1 units, PacketCable, OpenCable, Go2Broadband and In-Home Networking-are moving ahead relatively smoothly.
CableLabs CEO Richard Green said he is enthusiastic and pleased. "We are working two shifts, and the parking lot is full. Obviously the CE industry is supporting this," he added.
Jim Chiddix, senior vice president and chief technical officer at Time Warner Cable, also gave CableLabs high marks.
"Cable-industry standards activities are moving ahead, and we are really pleased with the success of DOCSIS, in particular. In terms of a standard, that is the model we are patterning everything after," Chiddix said.
William Johnson, deputy chief of the FCC's Cable Services Bureau, echoed that sentiment. "It is pretty amazing that CableLabs got as far as they got," he said, pointing out that the recently announced digital-TV-labeling agreement involving the Consumer Electronics Association and the NCTA demonstrated that the FCC's technology agenda was in remarkably good shape.
"DTV compatibility is the FCC's top priority. Digital must-carry is not possible without DTV compatibility," Johnson said. "With DTV labeling now accomplished, all of the technical and marketing questions are done with the exception of copy protection."
Copy protection is not holding things up at this point as far as Johnson is concerned. "You can do design work at this point. The consumer-electronics industry does not have to wait for [Motion Picture Association of America president] Jack Valenti's blessing, although they might have to tweak something at the last minute," he said.
Said Green: "With respect to OpenCable, we have done our job, and we have done it well and on time. As for the retail process, I do not know how it will work, and it would be inappropriate for us to get involved in any of the marketing plans of operators or CE manufacturers."
What a difference a few months can make. The upbeat mood that surrounded HDTV for much of 1999 is now more subdued and even gloomy. "HDTV is in a shambles today," Green said.
Michael Silbergleid, editor of DigitalTelevision.com, said there were so few buyers of HDTV gear that most HDTV set owners in New York know each other. He also downplayed the importance of the digital-TV-labeling agreement.
"Congratulations. Now at least we have the rhetoric sorted out," Silbergleid said.
He pointed to the recent announcement by Mitsubishi Digital Electronics America Inc. that it would no longer underwrite CBS Corp. HDTV programming in primetime, as well as to the sale of Panasonic Consumer Electronics' HDTV-production truck to The Ackerly Group, as discouraging developments for HDTV-set owners.
"We are dying out here-dying for more HDTV content. There is less HDTV programming, but more people with HDTV [sets] this year. However, we all knew that when we bought our HDTV systems, we were taking a risk," Silbergleid said.
With respect to HDTV, Chiddix said, Time Warner Cable will soon add Fox Broadcasting Co.'s WNYW-DT to its HDTV roster in New York, and in the coming weeks, all of the HDTV channels the operator now carries via 8-VSB will be switched to 256-QAM (quadrature amplitude modulation).
"We are getting CBS HDTV from off-air in New York City, and we will get Fox the same way, because that is the simplest approach for now," he added.
By trying to maintain a hands-off attitude, the FCC finds itself between a rock and a hard place as powerful interest groups and organizations such as the National Association
of Broadcasters express strong doubts about the its stance, as well as the pace and operating rules surrounding the digital-TV transition.
"This is definitely not an easy task. We are trying to be nonintrusive, while we still keep parties moving along. With all of the various engineering parties involved, there is a need to have someone to push in order for timetables to be met," Johnson said.
In May, the NAB declared, "The laissez-faire assumption of the FCC that the other necessary pieces to the DTV transition would fall into place in a timely fashion by virtue of the marketplace alone can now be fairly said to be proved wrong. The NAB and its member stations have placed their futures on DTV. But broadcasters cannot do it alone."
"It is not just up to the cable operator to carry or not carry broadcast HDTV. That is one of issues in our proceeding. It is up to operators to carry or not carry HBO [Home Box Office] or other cable HDTV content," Johnson said.
While digital must-carry, digital-TV compatibility and the future of HDTV are no doubt paramount concerns, one must make an occasional detour around what might otherwise seem like a seemingly insignificant issue. A set of filings at the FCC might fit into this category.
In late April and early May, MSOs AT & T Broadband and Charter Communications Inc. asked the FCC for temporary navigation-device-related waivers.
With the July 1 deadline for separation of security and nonsecurity functions rapidly approaching, both companies want the FCC to give them a little time, so they are requesting a waiver of the analog separate-security requirement as it applies to so-called hybrid or analog-digital converter boxes.
Among other things, no analog PODs exist.
These waiver requests appear to affect few subscribers. Both AT & T Broadband and Charter list the number of subscribers affected as 1 percent or less of their combined 17 million-plus subscribers.
What these filings have generated in terms of reactions from various parties-including Virginia-based Circuit City Stores Inc. and the CEA-is what warrants closer scrutiny.
"I do not know why the CEA wants to fight this battle. Cable-Labs issued OpenCable specifications for an analog POD and host. We polled the CE manufacturers, and no manufacturer declared any interest in building them," Green said. "Everything is digital."
Green sees the continuing attempt to move the date for full cable-industry reliance on all OpenCable specifications, including the security interface, from the current deadline of Jan. 1, 2005, ahead to Jan. 1, 2002, as one of the real reasons for these filings. Circuit City stated this objective clearly in the closing sentence of its 13-page filing, for example.
"Circuit City has repeatedly raised this issue. They have never accepted the FCC date of 2005. Would a shift to 2002 create an unwieldy burden for cable operators? Absolutely," Green said, adding that the language in the CEA filing in opposition to the AT & T Broadband and Charter waivers May 22 seems to be at odds with the joint CEA/NCTA labeling agreement for digital-TV sets issued just two days later.
Two days after the May 22 CEA filing, the CEA and the NCTA issued a rather glowing press release announcing the resolution of the longstanding and critical labeling issues. And the CEA filed a 24-page reply to the FCC's notice of proposed rulemaking regarding the compatibility between cable systems and consumer-electronics equipment.
"When you put the documents side-by-side, it appears that they could not have been written by the same organization," Green said, adding that he is quite puzzled by the CEA's language and timing.
For example, after an opening reference to working in "a constructive partnership" with the NCTA, the CEA raises significant questions in its May 24 filing about the cable industry's motives.
"Cable operators continue not only to deploy proprietary systems requiring operator-supplied set-top boxes that are not subject to any compatibility constraints, but to invest further in the development of such proprietary technology," the CEA said.
"Even though new generations of operator-supplied set-top boxes possess POD interfaces, these devices rely on proprietary features and systems that do not conform with OpenCable specifications," it continued, adding that significant questions surround the status of POD-based host-navigation devices.
"These trends can only be seen as an effort, whether by design or inertia, to overwhelm the commission's navigation - devices rules-in particular, the phase-out of set-top boxes with embedded security, by sheer weight of deployment," the CEA added.
This emphasis on a much broader effort is also encountered in the earlier CEA waiver-related filing. At that time, the CEA reminded the FCC that "while the CEA does not wish to be perceived as favoring obstructionism or micromanagement of the commission's navigation-device rules, it does urge the commission to set precedent here that will deter more expansive requests based on similar logic that would have the effect of nullifying the rules as they apply to hybrid systems."
The CEA spelled out what the commission's response should be: "The commission should move to change its rules in order to expedite the phase-out of operator-supplied navigation devices that combine conditional-access and other functions, and to enforce these requirements vigorously in order to facilitate the commercial market for navigation devices that Congress has mandated."
The assertion that the cable industry is unable or unwilling to comply with the FCC's POD-related rules permeates the CEA, which puzzles Green. He asserted that while CableLabs was doing everything in its power to expedite the availability of OpenCable-based hardware for consumers, the process takes time.
"We have had people here with TV sets that accepted PODs, but they were very prototype. How long will it be before CE manufacturers start producing TV sets with built-in OpenCable functionality? We do not know. High-performance OpenCable boxes take time to develop," Green said.
As of late April, the six-week certification process for both PODs and host devices has been under way at CableLabs. In addition, since late 1999, interoperability tests for removable security technologies involving nine major consumer-electronics manufacturers-along with five vendors of conditional-access systems and three headend-equipment suppliers-have been conducted.
Updated specifications for host devices were also released by CableLabs, which were the direct result of feedback from its ongoing interoperability tests.
CableLabs is now turning its attention to specifications for standardized application-program interfaces, or middleware, which will greatly broaden the portability of OpenCable products and applications. This is a challenging undertaking in itself.