Cable ‘has had years to prepare’ for the integration ban on set-t...

97-80) responding to the NCTA’s latest call for extending or scrapping the ban (CED Dec 22 p6). “NCTA’s assertions that the costs associated with the separate security requirement will remain high are patently wrong,” CEA said. Moreover, cable’s arguments that licensing, warranty and indemnification costs are borne only by the cable industry are “grossly misleading,” and its claim that pricing of leased set-top boxes is set by govt. mandate is a “total fallacy,” it said. “Cable companies can and do charge whatever prices they choose. The notion that cable MSOs will suddenly have to switch out their entire fleets of set-top boxes, even though the regulation explicitly gives them the right to keep existing devices in service, also is unsubstantiated,” CEA said. “Innovation and consumer choice hang in the balance” with the July 2006 deadline, the association said. “Only full- scale production to service MSO devices will achieve the combination of priority, investment, and volume necessary to lower acquisition costs, achieve reliability and generate confidence for competitive entrants and consumers. NCTA’s misguided belief that prices will remain high even after full-scale production defies the laws of economics, the marketplace and common sense.” With the Commission likely soon to rule in the debate on keeping the integration ban, TiVo CEO Mike Ramsay was among those supporting the CEA in urging that the FCC “hold fast” to the July 2006 deadline. In a Dec. 22 letter to Chmn. Powell, Ramsay said what’s at stake is availability to consumers of alternatives to cable- supplied set-top boxes. Without the ban, innovations TiVo has developed “will not be available to cable subscribers because TiVo will not be able to sell a digital cable box that is either the functional or competitive equivalent of cable-leased boxes,” Ramsay said. In particular, he said, TiVo must be allowed to offer a dual-tuner set-top box in competition with dual-tuner boxes leased by the MSOs. “Most consumers will not purchase a TiVo box no matter how much better our user interface or how many additional features we can offer if the device must be purchased rather than leased and still is missing the minimum base functionality that consumers value most in a digital video recorder,” Ramsay told Powell. “Simply put, if cable is not required to use the same CableCARD technology that is required of scores of information technology companies, cable will leverage its dominant position in video distribution into the market for video-related consumer electronics and will control the market for the indefinite future.”