NCTA Stands Behind DTV Agreement

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Despite criticism from a number of players, the National Cable &
Telecommunications Association continues to support unchanged the agreement
designed to bring cable-compatible digital-TV sets to the market perhaps later
this year.

The agreement reached in December between cable MSOs and the
consumer-electronics industry has come under fire from broadcasters, Starz
Encore Group LLC and even small cable operators.

But the NCTA said many of the complaints reflected a misunderstanding of the
agreement or faulty legal and policy analysis.

The MSO-CE deal -- which the parties want the Federal Communications
Commission to codify into federal rules -- is designed to allow the reception of
one-way digital-cable service without a set-top box.

The National Association of Broadcasters has asked for the agreement to
guarantee that any digital-cable-ready TV sets include tuners to capture off-air
digital-TV signals. The NCTA said that although the deal does not contain "an
express requirement" for inclusion of tuners, it does not stop CE firms from
building them into sets.

Starz Encore complained that the agreement threatens its
subscription-video-on-demand plans because SVOD programming is subject to a
"copy-never" requirement when, in the programmer's view, a "copy-once" regime
should apply.

The NCTA said the agreement does not prevent Starz Encore from reaching
copy-once deals with content suppliers.

"Starz and the studio may negotiate any appropriate terms, from copy freely
to copy never. There is nothing in the proposed rules that interferes with such
negotiation," the trade group said.

The small-operator American Cable Association expressed concern that the
agreement would impose cost burdens on its members.

The NCTA said FCC rules already contain waivers for small operators having
financial problems, and copy-protection mandates on high-definition set-tops
taking effect in July 2005 would apply to new boxes, meaning no expensive
retrofitting of boxes in the field.

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