Long road to open cable for consumer electronics
A new FCC regulation could open the door for more devices to connect to the cable system. But some hurdles still need to be overcome, because some of the technology is not on the free market.
By Tam Harbert, Contributing Writer -- EDN, July 24, 2007
An FCC regulation that took effect in July opens the door a little wider for competition among set-top boxes and other consumer devices to connect to the cable system. But a true open market may not be possible until the cable and consumer electronics industries agree on a technology for two-way transmission of signals.
The latest regulation is just one more skirmish in a decade-long fight between the cable industry and consumer electronics manufacturers over access to cable networks.
The Telecommunications Act of 1996 required the U.S. Federal Communications Commission to create rules that would allow consumers to obtain "navigation devices"—set-top boxes, remote control units, and other equipment—from sources other than cable service providers. In 2000 the FCC issued a regulation requiring cable companies to provide separate modules that contained conditional access security—the electronics that enable subscription to various cable packages. The intent was to foster a market in which manufacturers could incorporate a slot in their machines so that consumers could simply plug a module—which would be leased from the cable company—into their devices.
After several delays, the cable cards started becoming available in 2004, but the market has been slow. Today, there are eight million digital-cable-ready TVs (sets that include a cable-card slot) on the market, according to the Consumer Electronics Association (CEA). But fewer than 300,000 cable cards have been deployed.
Each side in the fight offers its own explanations. The cable industry argues that consumers simply don't want the cards, either because they don't want the hassle of having to add a card when they can get the same functions in their cable box (the cable industry was permitted to continue integrating the security function in its own boxes) or because the current cable cards are only one-way (they receive programming from the cable network but don't allow interactive services such as electronic programming guides and pay-per-view). The consumer electronics industry contends that the cable industry has not promoted or supported the cable cards, because it wants to continue leasing consumers its own integrated boxes.
"The cable companies haven't embraced the cable card," says Julie Kearney, senior director and regulatory counsel at the CEA. "They don't want competitive devices."
But as of July 1, most cable companies must separate the security from their boxes and use the cable card like everyone else. (The cable companies have warned that this will mean higher monthly payments for consumers, because the companies have had to redesign their boxes.) The CEA hopes that that will spur the cable industry to invest in cable cards to make sure they work well and to train their workers to provide better technical support. "It gives us assurance that there will be a market," says Kearney. "We can see a whole bunch of new devices on the market if this technology is unleashed."
But there's still a leash on at least some of the technology. The July regulation is only one step toward a free market, says Adam Goldberg, vice president of government and industry affairs for Pioneer Electronics (USA), whose plasma TVs incorporate the one-way cable card slot. Before his company and others can design new and innovative platforms, the cable and CE industries need to agree on how to implement two-way interactive services on the cable card, he says.
What should the standard be?
CableLabs, an R&D consortium of the cable industry, has proposed the OpenCable Application Platform (OCAP) as a standard for the bidirectional card. The standard specifies that the host device provide a Java environment that can run OCAP programs downloaded from the cable company. This means that OCAP "takes control over customers' devices by requiring that they use these proprietary applications to access services like video on demand or enhanced program guides," according to a June letter to the FCC from The Public Interest Group, a nonprofit that advocates for consumer rights in the Digital Age. "The CableLabs DCAS/OCAP 'solution' is designed and licensed to limit a third-party hardware manufacturer's ability to offer its customers innovative features without first getting the cable industry's permission," the letter continues.
The CEA and 12 technology companies, including Intel, Microsoft, Sony, and Dell, filed a different proposal with the FCC late last year. They proposed making OCAP an optional standard and allowing third parties to provide interactive services based on existing standards.
The cable industry's proposal would create a bifurcated market—with basic one-way functions on the low end and two-way functions on the very high end, says Goldberg. "It leaves a big open space in the middle of the market," he says. "We need something that allows us to build products that do bidirectional interactive features, without all the bells and whistles of the OCAP system."
Even if Pioneer were to license OCAP and build a high-end box, the fact is that few cable operators have deployed OCAP systems so far, Goldberg says. "And there is no regulation that requires the cable operators to deploy OCAP nationwide." That means that manufacturers have no assurance that their OCAP TVs would work everywhere in the country, he says.
Because the two sides seem unlikely to come to an agreement, the FCC is stepping in. In June, the commission issued a Notice of Proposed Rulemaking seeking comment on the two proposals. It also asked for comments on approaches that will enable two-way communication with other video providers, not just cable. There is no deadline by which the FCC must issue a ruling, but at least one commissioner wants a speedy resolution.
"This is a rulemaking that can wait no longer," Commissioner Michael J. Copps said in a statement. "It has been 11 years since Congress directed the Commission to assure that equipment used to access video programming and other services offered by multi-channel video providers are available to consumers at retail. And yet today consumers cannot walk into their local retailer and purchase a television set that will receive two-way digital cable services . . . without renting a set-top box from their local cable operator."
Meanwhile, at least some consumer electronics companies aren't waiting for a resolution but are moving ahead with OCAP. Samsung, LG Electronics, and Panasonic have all pledged to bring OCAP–based set-top boxes and/or TVs to market. And Intel, one of the signatories to the CEA's letter opposing OCAP last fall, has had a change of heart. In June its Consumer Electronics Division announced that it would enable OCAP on Intel architecture SoCs it plans for Internet-compatible consumer electronics devices. The first CE-optimized chip is scheduled for 2008.
"Our goal is to go with the volume platforms out there, and U.S. cable happens to be one of those platforms," says Wilfred Martis, the Intel Consumer Electronics Group's director of marketing. "OCAP is very exciting for us, because it enables two-way interactive services. Bringing our Intel architecture to this space can allow our OEMs and the multiple system operators to deploy very compelling applications."
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