Harvard Professor Wrong to Urge CableCARD Waiver Denial, RCN Says
Cable operator RCN “disregards its obligations to provide CableCARDs to consumers upon request as required by the FCC,” and so should be denied its CableCARD waiver request, a Harvard Business School professor and RCN subscriber told FCC Chmn. Martin in a letter last week. However, the professor, David Yoffie, didn’t tell Martin the whole story when he alleged RCN refused to supply him with the 2 CableCARDs he needed for his new TiVo Series3 DVR, RCN said in an ex parte filed at the Commission. And Yoffie was politically motivated to urge the FCC to reject RCN’s petition because he’s on the Intel board, and Intel has opposed other waiver requests at the Commission, a senior RCN executive told us.
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Twice in late March, Yoffie contacted RCN to ask for 2 CableCARDs, he told Martin in his April 11 letter. “Each time, RCN has refused to provide me with any CableCARDs, claiming that RCN has no CableCARDs and cannot provide me with any estimate as to when (or if) CableCARDs may be available to me in the future,” Yoffie said: “Rather than provide me with CableCARDs as I requested, RCN tried to convince me to use RCN’s own DVR instead of using CableCARDs for the TiVo Series3 DVR.” Within 24 hours of filing his complaint with Martin, Yoffie got a call from an RCN gen. mgr. to say CableCARDs had just arrived and that 2 would be set aside for him, Yoffie told us in an April 16 e-mail.
Yoffie “has an agenda that goes beyond a personal customer service issue,” Richard Ramlall, RCN senior vp- strategic & external affairs, told us in a statement. One explanation: Yoffie is an Intel board member and Intel filed an opposition to Comcast’s waiver request June 15, 2006, Ramlall said. Intel couldn’t be reached for comment.
RCN handled Yoffie’s complaint “as it would any other,” and wrote Yoffie an explanation in an April 16 letter, RCN said in an ex parte filed Wed. that included a copy of the letter. “While RCN would not ordinarily place correspondence to a customer into the Commission’s public record,” it wanted to set the record straight and refute Yoffie’s claim that his personal TiVo experiences “warrant denial of a waiver,” RCN said.
In the letter to Yoffie signed by Ramlall, RCN apologized that CableCARDs weren’t available when he had inquired. But “the problem you experienced resulted from a delivery shortage” of CableCARDs “and not from any unwillingness by RCN to provide our customers with CableCARDs for use with equipment they purchase at retail outlets,” Ramlall said. It blamed the shortage on Motorola’s “changeover” to a multistream CableCARD (M-CARD) from a “discontinued” single-stream (S-CARD) version.
In the interim, RCN customer service reps were instructed to offer customers a loaner DVR until CableCARDs became available, Ramlall said: “I regret that you interpreted this offer as a purposeful effort to force you to use RCN-supplied equipment and not your new TiVo DVR. It was meant to be an offer to mitigate any inconvenience to customers as a result of the delay.”
Yoffie was wrong to use RCN’s supply problem as a basis to advocate that the FCC deny its “very limited” waiver request, Ramlall said. Its petition for a limited waiver wouldn’t apply to high-end set tops that compete with products like the TiVo Series3, he said. The waiver is justified so RCN can continue to provide a low-cost option to subscribers who don’t want a high-end box, he said. It’s also crucial to free up more HD programming capacity, he said.
Motorola hasn’t discontinued single-stream S-CARDs, said Mark DePietro, vp-strategy for Motorola’s video business. “We're seeing many customers shift their orders from the S- CARD to the M-CARD, but we'll continue to offer both products,” DePietro told us. In Dec., Motorola decided to “greatly increase our capacity of production of M-CARDs because we anticipated the market would be shifting primarily to those,” DePietro said. “So we actually brought up additional lines of production and diversified across a couple of continents” -- N. America and Asia, he said. “In the process of doing that, we had a slight delay as we needed to take the expertise that existed in only one continent and move it to 2,” he said. S-CARD and M-CARD supplies are now plentiful, he said.
The shift in demand toward M-CARDs is because they're more “versatile,” DePietro said. M-CARDs are backward- compatible, so they can be used in both M-CARD and S-CARD applications, he said. “We are very committed to both product lines,” he said. “We have multiple M-CARDs, and we're very committed to having an uninterrupted supply. That stated, every now and then things can happen and you can have slight hiccups in the supply chain.” Motorola has no plans to phase out its S-CARDs, he said.