Cable’s the Culprit for Low CableCARD Deployment, CEA Says

CE makers “have met their obligation” under the plug-&- play order that took effect July 1, Petricone said. “Every major manufacturer is producing and marketing” CableCARD- ready sets, he said. “But cable needs to promote the capability -- they have the best tools to reach their customers. Little promotion is being done and, in some cases, we've heard that cable providers are actually discouraging a migration to CableCARDs by charging high rates, or having uninformed salespeople” on hand to explain their benefits. Moreover, Petricone said, many of those consumers fortunate enough to get a CableCARD have faced technical issues “that would have been ironed out long ago if cable had been relying on the card in their own devices.”

Eliminating the July 2006 integration ban -- as cable has lobbied the FCC hard to do -- “threatens to make the situation worse,” Petricone said. Only the MSOs’ reliance on the CableCARD will assure that they “invest the time and resources to make sure CableCARDs function effectively for consumers,” Petricone said. Scrapping the deadline would send the wrong signal to the public that “there is no interest in supporting CableCARDs or a competitive marketplace for CE devices, he said. “That’s why companies as diverse as Sony, Microsoft, TiVo and Intel have been urging the FCC to leave the deadline in place.”

Although Petricone didn’t respond directly to our question whether he believed the FCC would take up the integration ban at its next scheduled meeting Jan. 13 -- as has been speculated -- he said CEA was confident the Commission would side with CE and leave the July 2006 deadline intact. The Commission has stated “as a matter of policy that they want a competitive marketplace in cable products, and we fully expect that they will retain the deadline,” Petricone said.

At Thomson, Dave Arland, vp-corp. & govt. affairs, told us his company believes any disparity between the number of CableCARDs deployed and the volume of CableCARD-ready sets shipped was less important than making sure the technology works. In the final analysis, he said, the actual volume of CableCARD-ready sets shipped will come very close to projections, Arland said. But if this first generation of unidirectional CableCARD technology isn’t successful, it puts at severe risk any chance that bi-directional interactive CableCARD products -- now bogged down in complex multi- industry negotiations -- will ever happen, Arland said. Although there are “several thousand” satisfied customers who have bought CableCARD-ready sets, one real shame of the CableCARD rollout thus far has been the spate of technical problems that have resulted in consumers returning the DTV set to the store, Arland said. He said while there hasn’t been a “pervasive” volume of returns, it has put a “tremendous strain” on Thomson’s customer call centers and engineering teams.

Notwithstanding CEA’s expectations that the FCC will leave the July 2006 deadline intact, cable in recent days has pulled out its big guns to lobby the Commission to extend the deadline 18 months or scrap it altogether. For example, Comcast CEO Brian Roberts phoned FCC Chmn. Powell personally Dec. 22 to urge that the Commission “not prohibit cable operators from deploying set-top boxes with integrated security” after July 2006, according to an ex parte filing (MB 97-80) at the FCC. Contrary to CE claims that it’s not operating on a level playing field with cable, Roberts told Powell “the competitive availability of navigation devices already is being achieved” through the CableCARD rollout, the filing said. A day later, Time Warner Cable CEO Glenn Britt phoned FCC Comr. Martin to say “there should be no doubt” as to cable’s commitment to the successful deployment of CableCARDs, his company said in a separate ex parte filing. Over 2,000 CableCARDs have been installed to date by Time Warner Cable, and the number is “expected to increase rapidly,” the filing said. Like Roberts, NCTA and other cable industry advocates, Britt told Martin that leaving the ban intact “would now serve only to limit consumer choice and unnecessarily raise costs to consumers,” the filing said.