A Reader’s Guide to the FCC’s 2nd Report & Order On Navigational Devices

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There’s a little bit of everything in the FCC’s St. Patrick’s Day declaration: deadline relief, new rules, new technologies, big names and big promises.

As regulatory documents go, the “2nd Report & Order on Navigational Devices,” as it’s called, is pretty absorbing. It runs over 37 pages, including an extra meaty, 17-page chronicle titled “State of the Navigation Market,” which consolidates everyone’s views, including all the big players.

If you can read just one part, read section III. It’s a meticulous summary of everything that’s happened so far. And if you haven’t the time even for that, this week’s translation is intended as a reader’s guide to the new rules.

BIG WINS FOR CABLE

The big news, already widely reported, is a push to July 1, 2007 (from July 1, 2006) of the ban on deploying integrated set-top boxes. That means digital cable boxes with built-in security, like everything deployed so far. Obviously, this is a big win for the home team.

There’s a second, more subtle win, too. It’s the FCC’s support of “downloadable security” as a potential replacement for the hardware known as CableCard (the card itself, and the slot it slides into.)

Downloadable security, also known as “downloadable conditional access” and “downloadable CA,” grew out of the Next Generation Network Architecture (NGNA) effort advanced by Comcast Corp., Time Warner Cable and Cox Communications Inc. last year.

Their reasoning: If security becomes virtually separable (a software thing) instead of physically separable (a hardware thing), implementation costs drop for everyone.

DOWNLOADABLE AID

The FCC likes it for its potential to serve as a common security base for old and new makers of cable-ready devices. As commissioner Jonathan Adelstein explained: “We … decided to postpone [the ban], for one year only, to give the players involved a chance to determine whether a downloadable security solution is feasible, and if so, when it could be implemented.”

Cable’s deadline for the feasibility answer is Dec. 1. If it turns out that downloadable security is do-able, but not by July 2007, the FCC will consider a further extension.

But that admission came late in the document, abutted by this no-nonsense declaration: “We expect cable operators to work diligently.”

THE NEXT FIGHTS

Also due on Dec. 1 is a list of all licensing terms that will be required of manufacturers who want to build cable-ready devices with downloadable security. If history is any guide, that list will color next year’s work between cable and the consumer electronics community.

As this column has described before, the CE industry operates on thin margins. Very thin. Anything smelling of cost elicits a yowl.

And, though it can’t technically be tagged a “win,” the home team thought it good news that the FCC is hip to the time-to-market tradeoffs between standards and innovation. In other words, it will not force cable to be in lockstep, standards-wise, with CE manufacturers, before introducing new services. A common security mechanism should be enough for both parties to innovate, the FCC reasons.

DISAPPOINTMENTS

And then there’s the bad news. Cable had angled for a full removal of the ban. They got an extension. Abolishing the ban seems unlikely; the FCC’s strong implication was “don’t ask us again.”

Then there’s the issue of “multistream” CableCards. They’re needed when you want to record or otherwise tune one scrambled program, while recording or watching another scrambled program. Technical specifications exist for multistream cards, the FCC notes, but none are in consumers’ homes yet.

Translation: If the industry doesn’t get moving on multistream, any further requests (such as for more extensions) will raise eyebrows.

The FCC was clear about its discontent, too, over the lack of competing two-way devices, sold at retail: “The bidirectional negotiations have been disappointing.”

Still, the commission acknowledged that cable and CE manufacturers convened more than 30 times in the five months since Oct. 19, 2004. (Quipped one regular attendee: “Feels more like 300.”)

Also encouraging, the FCC said in its order, is the promise on Feb. 24 from mucketies at Microsoft Corp., Time Warner and Comcast, to “personally supervise the efforts to reach a bi-directional deal.” (Personally.)

Ultimately, the FCC said, the deadline extension should “infuse new life into the stalled bidirectional discussions.” Hope springs eternal.

WHAT’S ON TO-DO LIST

The to-do lists associated with the Report & Order mostly involve reports. Lots of reports. There’s the feasibility study and licensing list for downloadable security, due in December.

Then there’s a new series of progress reports. One is bimonthly, starting on August 1, to update the FCC on how downloadable security is going over in the two-way talks. Both cable and the CE side need to file those.

Another is cable-specific, and it illuminates the FCC’s worry that CableCard installs … have issues. It’s also due on August 1, and every 90 days thereafter, but only from the top-six operators.

That report needs seven sections: CableCard availability, number of cards in service, whether service calls were needed, average number of truck rolls per CableCard install, monthly charge and average install cost, deployment problems, and problem resolution.

That one also needs to contain the plan for multistream CableCards, including a deployment timetable. Dallying doesn’t seem to be an option: “We expect the timetable provided in the report to be in the near future.”

That’s a summary of the big stuff in the new rules. Next time, a deeper dive into conditional access.

Stumped by gibberish? Visit Leslie Ellis at www.translation-please.com.

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