Time Warner, NCTA Seek Set-Top Relief

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Washington -- Two trade associations and Time Warner
Entertainment are asking the Federal Communications Commission to change several
already-issued rules about interoperable set-tops.

Last week, the National Cable Television Association, the
Telecommunications Industry Association and TWE filed petitions against the FCC's
"navigational-device" ruling, which was issued in June.

The top two concerns: a 2005 sunset banning operators from
selling or leasing set-tops that combine security and channel-surfing functions, and a
decision to separate security functions out of analog devices.

Those two mandates should be dropped, the petitioning
parties said.

The FCC believes that the segregation of security and
channel-selection features is critical to establishing a retail market for set-tops.

But TWE, in an Aug. 14 filing, said dropping the mandate
would not violate the Telecommunications Act of 1996, which called for commercially
available set-tops. Instead, it would deny consumers access to integrated boxes that may
be more affordable than nonintegrated boxes supplied by the cable operator or sold at
consumer-electronics retailers such as RadioShack, Best Buy or Circuit City.

"As long as consumers have the option to purchase or
lease component devices, there is no reason why they should not also have the option to
obtain an integrated device from their [cable operator]," TWE said.

The NCTA echoed that argument, additionally asking the FCC
to reconsider its rules that would separate security methods out of analog set-tops.

Referring to a July 2000 deadline stipulated by the FCC,
the NCTA cited serious practical and technical security problems in separating security
out of analog boxes. "Requiring separation at all -- and, in any event, by July 2000
-- is arbitrary, unrealistic and inconsistent with the statutory command that the FCC
rules not jeopardize signal security," the association said.

The NCTA pointed out that analog techniques are not part of
the OpenCable effort.

OpenCable is a Cable Television Laboratories Inc.-driven
industry effort to define digital interfaces and related technical underpinnings for
interoperable digital devices. It is also quickly becoming the industry's political
face in Washington, D.C.

An FCC source said it was too early to measure the
agency's reaction to the requests. But the source added that although there is solid
support for a sunset on integrated boxes, it's possible that the 2005 deadline could
be negotiated.

TWE also protested the FCC's decision to exempt
open-video-system operators and direct-broadcast satellite companies from the set-top
rules.

"The commission's analysis simply ignores how
broadly Congress has defined an MVPD [multichannel-video-programming distributor],"
TWE said.

And there's more: TWE also asked the FCC to include
consumer-electronics and set-top manufacturers in the scope of the rules.

"It is entirely unreasonable to place the entire
burden ... on cable operators, without also requiring equipment manufacturers to shoulder
reciprocal responsibilities," TWE said.

That's because manufacturers, according to TWE, are
"in a far better position to thwart the commercial availability of navigation
devices" than operators are.

TWE suggested that the FCC add a requirement for analog-TV
tuners, VCRs and set-tops sold after July 1, 2000, to be equipped with analog decoder
interfaces -- connector plugs -- "so that there will be a demand for the component
descramblers that MVPDs are required to have on hand for their customers ... so that
equipment manufacturers shoulder their fair share."

TWE also asked for clarification on the FCC's ruling
about conditional access, which said that this equipment -- the circuitry that ensures
that only customers who pay for premium programs receive them -- should connect with other
navigation devices through a commonly used interface.

Cable-equipment manufacturers said last week that they, as
NCTA members, supported the organization's FCC petition. "This and other
documents are attempts to drive reality into the process," said David Robinson,
general manager of General Instrument Corp.'s digital-video-business unit.
"It's a way to suggest to the FCC that although it's done a decent job,
it's made some errors in a few significant areas of concern."

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