Paul Gluckman

“Continuing” industry negotiations on audio flag content protections for HD Radio were the reason the FCC deferred action on the issue in its terrestrial DAB order (CD March 23 p5), Brendan Murray, Policy Div. attorney in the Commission’s Media Bureau, told the Commission’s open meeting Thurs. Murray couldn’t be reached Fri. about whether jurisdictional issues also played a role in the deferral. The U.S. Appeals Court, D.C. rejected the Commission’s video broadcast flag rules on grounds that it lacked statutory authority to enact them.

DTV converter coupons can’t be used for boxes bundled with smart antennas, contrary to our earlier reading of NTIA’s rules (CD March 13 p1). Funai had asked NTIA to make such bundles eligible for coupon use, estimating they could sell for less than $100 retail. But the rules say NTIA refused because the DTV statute defines coupon-eligible converter boxes (CECBs) as stand-alone devices: “The purchase of a smart antenna at the same time a consumer purchases a converter box equipped with a smart-antenna interface will ease the installation and operation of the converter box for many people. Manufacturers or retailers may wish to offer combined purchases of converter boxes with smart antenna interfaces and smart antennas at promotional prices. The CECB, however, must be presented for sale at all outlets as a standalone single unit and cannot be sold conditioned on the purchase of any other items.” NTIA sources said the rules mean coupons can’t be applied to DTV boxes shrink-wrapped with smart antennas.

Unresolved technical issues obstruct CableLabs approval of DTCP-IP as a digital output protection technology for one- way plug & play cable devices, MPAA said. MPAA was answering a DTLA petition at the FCC urging the Commission to reverse CableLabs’ “wrongful refusal” and order it to approve DTCP-IP (CD March 2 p10). One problem is that many channels on cable’s digital “basic tier” aren’t scrambled at the cable operator’s headend, MPAA said: “This means that content carried on these channels would not be afforded any DTCP-IP protection when output over IP-based wired Ethernet or 802.11 wireless network connections… When unscrambled digital cable content is output in the clear over an IP-based output, it is exposed to mass, unauthorized redistribution and copying over the Internet.” To fix such lapses, MPAA, DTLA and CableLabs are working “to develop a means for providing protection to digital cable content carried on the digital basic tier in unscrambled form,” MPAA said. CableLabs, “in collaboration with DTLA,” also must define procedures for delivering and processing “system renewability messages” to promote the “long-term effectiveness of all digital output protection technologies,” MPAA said. Before the FCC rules on DTLA’s petition, it should allow “sufficient time” for MPAA, DTLA and CableLabs to “negotiate a workable solution” on DTCP-IP, MPAA urged.

That the partisan divide is as wide as ever over whether there’s enough money to supply DTV coupons to all who want them was evident at this week’s House Telecom Subcommittee hearing on the DTV transition (CD March 29 p1). But for now, Democrats who say NTIA’s coupon program is vastly underfunded seem content to maintain close oversight over the process as they monitor coupon requests, converter box availability and consumer outreach.

It’s not necessarily true that DTV coupon redemptions won’t begin until Q2 2008, NTIA’s program dir. told a meeting Mon. at Commerce Dept. hq to clarify the agency’s final coupon rules (CD March 13 p1). “We do anticipate widespread redemptions in the first quarter,” Anita Wallgren told the meeting, contrary to misinterpretations that they won’t be possible. NTIA called the meeting to tell the public about the program rules, but few if any ordinary citizens attended the session. Most in the audience of several dozen were lobbyists and representatives of vendors that plan to bid for the contract.

The vendor that NTIA picks to run the DTV coupon program must be ready to accept coupon requests Jan. 1, 2008, as required by law, but likely won’t start distributing coupons before April 1, 2008, or when systems are tested and certified as working. That was the message in NTIA’s request for proposals (RFP), released Wed. after months of delay.

NTIA’s final DTV coupon rules (CD March 13 p1) “show keen attention to concerns and comments” of retailers and others “who want the DTV transition to succeed,” the CE Retailers Coalition (CERC) said Tues. “The next step is for NTIA to choose a program vendor, who will make additional choices of crucial concern to retailers who would like to participate,” CERC said.

Despite 20 months of trying by DTLA, CableLabs refuses to approve DTCP-IP as a digital output protection technology for one-way plug & play cable devices, putting its “business interests over the interests of consumers and competition,” DTLA told the FCC in a much-expected petition (CD Feb 26 p11). DTLA -- founded by Hitachi, Intel, Sony, Matsushita and Toshiba -- urged the FCC to reverse CableLabs’ “wrongful refusal” and order CableLabs to “approve DTCP-IP as an effective digital output protection technology for audiovisual content.” The refusal “has nothing to do with content protection, theft of service, or harm to the cable network,” DTLA said. The decision arose from “extraneous considerations that impermissibly leverage its power to approve content protection technologies into virtual control over every device capable of receiving video content over the entire home network,” DTLA said. CableLabs conditions approval of DTCP-IP on license terms “that require every device that touches cable-received content, regardless of how far downstream that device resides on the home network, to permanently mark and segregate that content as ‘Cable Content,'” it said. This would force DTLA to re-engineer DTCP-IP “to restrict delivery of Cable Content only to devices that CableLabs considers part of its ‘cable ecosystem,'” DTLA said. “But what CableLabs benignly terms its ‘cable ecosystem’ is what a consumer calls ‘my home network’ -- the products a consumer buys for home personal entertainment. These CableLabs requirements constitute a rejection of DTCP-IP.” CableLabs said it stood by earlier statements that it keeps talking with DTLA and its member companies “to resolve outstanding business and licensing issues in an attempt to come to a marketplace solution similar to those CableLabs has reached with Microsoft, Real and Motorola for IP-based outputs.”

Sirius and XM vowed as a condition of their FCC licenses to “create the ability to have an interoperable radio, and we have such a radio -- it’s in my office,” Sirius CEO Mel Karmazin told a House Judiciary Committee hearing Wed. (CD March 1 p4). “The problem with it is there’s no receiver manufacturer that wants to pay to supply it,” he said in reply to a question from Committee Chmn. Conyers (D-Mich.). “We're subsidizing our radios today because we get a subscription from it. The idea of our subsidizing a radio when we may not get a subscription doesn’t make any sense for us.” Sirius and XM “did not in any way, shape or form” break their promise to the FCC on receiver interoperability, Karmazin said. “We've offered our intellectual property to receiver manufacturers, so any receiver manufacturer that wants to make an interoperable radio, they can make it. The problem is, it would sell for somewhere around $700 without a subsidy.” Sirius’ 10-K, filed Thurs. at the SEC, makes no mention of the receiver Karmazin cited at the hearing. “Our FCC license is conditioned on us certifying that our system includes a receiver design that will permit end users to access XM Radio’s system,” the 10-K says. “We have signed an agreement with XM Radio to develop jointly a unified standard for satellite radios to facilitate the ability of consumers to purchase one radio capable of receiving both our and XM Radio’s services. We believe that this agreement, and our efforts with XM Radio to develop this unified standard for satellite radios, satisfies the interoperability condition contained in our FCC license.”

Regulatory delays are “impacting” HD Radio’s rollout and FCC action is needed quickly “to restore regulatory clarity” to the technology, senior iBiquity Digital executives told FCC Chmn. Martin in meetings last week, according to an ex parte filing at the Commission. Noting “significant progress” implementing HD Radio, iBiquity urged speedy completion to the FCC rulemaking to advance the rollout. Company executives, including CEO Robert Struble and Senior Vp Albert Shuldiner, pressed the Commission to authorize nighttime AM service and let HD Radio broadcasters begin offering supplemental audio and advanced data services, the filing said. There 1,225 HD Radio stations on the air in 50 states, including 555 that are multicasting, iBiquity said. That’s a jump from the 814 stations and 249 multicasters in iBiquity’s last progress report July 5 at the FCC.