Motorola told the FCC leaving in place the July 2006 ban on integ...

anticompetitive. In an ex parte filing, Motorola said there was evidence in the record that a CableCARD-Host combination would cost a cable operator $71-$93 more than an integrated set-top with the same abilities. Motorola, with Scientific- Atlanta, has been a main supplier of CableCARDs. The 2006 ban would “stymie” development of a low-cost digital-to- analog set-top by adding substantially to the cost of such a device, Motorola said. “Congress and the Commission have recognized the importance of such low-cost devices to the digital transition,” the company told the FCC: “Raising the cost of these devices will undermine their appeal and thereby slow the transition.” Motorola said the ban also would be harmful because: (1) It would force all cable customers to bear additional costs, “even though the enhanced portability of CableCARD-enabled devices provides no added value” for customers who prefer leasing their set-tops because those boxes stay within a cable system. (2) It would remove a “cost-effective choice for consumers” who prefer to lease set-tops, although others may want to buy a CableCARD-enabled TV at retail. “The best public policy is to continue to let consumers make the equipment choice that best fits their needs.” (3) It’s unnecessary to foster a retail market for CableCARD- enabled products. CE makers are rolling out dozens of such products this year and expect to sell a millionin coming months, “even in the absence of a ban on integrated devices.” Motorola said it was “facilitating the development of a competitive marketplace” for integrated set-tops. Having licensed its conditional access technology to Pace, Panasonic and others, Motorola said, there’s “nothing to prevent the emergence of a retail market for such integrated devices.” The company said Shaw, Canada’s leading MSO, has successfully pursued a retail strategy for its integrated set-tops, and “secondary markets for such products have also developed through mechanisms such as eBay.” Claims that there are large-scale technical problems with the CableCARD are “overstated,” Motorola said, apparently in response to recent CE claims of “numerous technical implementation problems” preventing CableCARDs’ proper operation. As with any new product such as cable modems, “some glitches can be expected,” Motorola said. “But the cable and CE industries are committed to working to resolve any potential issues as was done, for example, with cable modems,” it said. Motorola said it fully supports ongoing talks to reach an agreement on bidirectional CableCARD devices. But like others, it said the negotiations had become bogged down by the “complexity” of the issues and the large number of participants. “At the very least, the Commission should afford the parties additional time to work through these issues so that an optimal, mutually agreeable 2-way standard is adopted,” Motorola said. But leaving the integration ban in place could cause the negotiations to break down and lead to the development of a “suboptimal” standard on 2-way or competing, mutually incompatible standards,” it argued. “That would be a bad result for consumers and all concerned.”