Cable, CE Yield Little Ground in Two-Way Plug & Play Comments

In its rulemaking notice, released June 29, the FCC asked whether it should pick from competing CEA and NCTA proposals to adopt two-way plug-and-play rules and whether satellite TV, IPTV networks and Bell pay-TV services should be subject to those regulations (CD July 2 p2). The Commission’s goal, the notice said, is for two-way plug-and- play products to reach store shelves in time for the 2008 holiday selling season. Cable and CE agree that OCAP should be “part of the solution” but disagree how, the notice said. Cable said it favors using OCAP as a standardized middleware layer. CE said it prefers making OCAP an option, not a requirement.

In their comments, CEA and NCTA stuck to familiar positions. Others, such as DirecTV and EchoStar, declined to take sides. EchoStar said the DBS industry has been “a spectator” as the cable-CE industry talks have dragged on. Both satellite providers urged the Commission not to foist on them one-size-fits-all rules for two-way cable plug-and-play. Microsoft, too, told the Commission that neither the CEA nor the NCTA proposal affords “a technologically viable option for IPTV architectures,” such as its Mediaroom. Microsoft helped develop the CEA proposal for two-way cable, it said.

That two-way “open-market” CableCARD devices remain unavailable at retail to compete against two-way cable-leased boxes less than 18 months before the DTV transition “cries out for definitive and expeditious action,” CEA told the FCC. CEA’s November 2006 proposal would speed to stores two-way plug-and-play devices including those without an OCAP requirement, and allow the Commission to finish the rulemaking “swiftly and decisively,” CEA said.

But NCTA told the commission it opposes CEA’s so-called DCR-plus solution because it would “disappoint, confuse and frustrate cable customers.” Cable said “it would strip away the most exciting interactive services and features” distinguishing “cable from its competitors, and give consumers no assurance that they would receive the cable services they want and paid for when they use different models of TVs,” NCTA said. NCTA’s 2005 open-market OCAP proposal offers “the fastest path for retail” and is the “only one that has any prospect whatsoever of bringing two- way retail options to consumers and retailers in time for the year-end 2008 holiday selling season,” NCTA said.

Touting OCAP, NCTA slammed what it called a poor CEA track record in backing development and successful marketing of plug-and-play products. NCTA said the CE industry had little success with one-way CableCARDs in TV sets. “CE was including only very limited functionality inside the TV to save manufacturing costs” while charging $200 to $300 more than TVs without the gear, said NCTA. “The vast majority of CE manufacturers did not know how to move from a single point-of-sale equipment business into an ongoing services business (such as cable),” it said. Cable operators are better positioned to upgrade technology on set-top boxes they lease , NCTA said. The FCC’s examination of plug-and-play evokes comparison between monthly fees that can run $8 paid by cable customers for set tops versus devices carrying a one-time charge.

NCTA still is pushing for plug-and-play rules covering all MVPD video providers, not just cable. Section 629 of the 1996 Telecommunications Act may have focused on expanding availability of cable set-tops to retailers, but it applies to all pay-TV sellers, NCTA said. “Congress warned the Commission that in implementing this directive, it must not constrain innovation, compromise security, or treat MVPDs differently,” the group said.

But DirecTV and EchoStar want to remain exempt from plug-and-play rules, they said, declaring that neither CEA’s nor NCTA’s two-way proposals would work well with one-way satellite service. They cited a 1998 FCC decision excluding satellite set-top boxes from cable navigation device rules because the boxes are sold at retailers. “There is no reason to revisit that determination,” said DirecTV. Applying two- way rules to satellite would “require all affected parties to start from scratch,” said DirecTV.

Applying two-way rules to satellite demands a “neutral third-party administrator” like DLNA, said EchoStar. “The inherent differences between cable, satellite and new IPTV offerings suggest strongly that a cable solution cannot simply be extended to other providers.”

AT&T said the Commission should know that no “one size fits all” approach will work for satellite or for Internet protocol video providers. “Unlike cable systems where regulations were needed to ensure that consumers could purchase compatible equipment, IPTV systems are likely - without government intervention - to evolve towards standards” for navigation devices, said AT&T. Verizon said the Commission should endorse “technology neutral” efforts and support the development of bidirectional standards by the Alliance for Telecommunications Industry Solutions.

CEA’s proposal wouldn’t “disturb or prevent the cable industry’s progression” to OCAP for promoting device interactivity and writing applications across various cable systems nationally, CEA said. Still, OCAP’s development and stability, though necessary, are “not sufficient to achieve the sort of competitive environment that would aid the DTV transition at the present crucial time,” CEA said.

Six consumer electronics companies, filing comments jointly as “home networking proponents,” said they “support strongly CEA’s comprehensive plan to achieve bidirectional digital cable compatibility.” The companies -- Hitachi, Mitsubishi, Philips, Pioneer, Sony and TTE -- signed the CEA proposal sent to the Commission in November. Intel, another signer, filed comments separately to say that only the CEA proposal is consistent with the “key principles” it has advocated throughout the history of the plug-and-play proceeding, including “consumer choice.”

Despite the CEA-NCTA deadlock, MPAA thinks multi- industry talks, not government rules, “are best-suited to achieving an agreement between all interested parties that will spur the rollout of bidirectional navigation devices” in time for the 2008 holiday selling season, it told the FCC. However, if the Commission “finds it necessary to intervene,” it should “take into account content owners’ concerns and refrain from taking actions that would preclude the implementation of marketplace agreements for content protection,” MPAA said. For example, the Commission shouldn’t bar CableLabs from putting an “image constraint trigger” in its licenses, MPAA said. The Commission also should adopt “a more flexible approach” on selectable output control, MPAA said.

But Public Knowledge said the Commission should reject the NCTA proposal’s call for authorization to use SOC and should maintain its ban on the technology. It jointly with eight other consumer and fair-use groups, including the Electronic Frontier Foundation, to back the CEA proposal. “The same objections to SOC raised in 2003 remain salient today and the ban on its use should remain intact,” the groups said.