The National Cable & Telecommunications Association today asked the FCC for a waiver of a requirement to physically separate out set-top box security technology from the main device, a mandate slated to go into effect on July 1, 2007. The cable group instead wants this deadline pushed back to 12/31/2009 or when downloadable security technology is ready, whichever comes first.
This relatively arcane issue could have a financial impact on all cable subscribers and could force the cable industry to spend $500 million/year on something that is, well, kind of stupid.
Background: The 1996 Telecom Act contained a provision on the commercial availability of “navigation devices,” a gift to the consumer electronics industry that required cable companies to make their set-top boxes ready for sale at retail. Following the Act’s passage the FCC established deadlines for implementing this provision.
Complexities inevitably ensued, most notably disputes between the consumer electronics industry and cable operators over the removal of security technology from set-tops into separable cards that only cable operators can give to customers. These separate cards, called CableCards, contain the keys to the kingdom, namely encryption technology that permit or deny access to cable services.
But, the FCC has ruled that all set-tops, including those sitting in customers’ homes today, be CableCard-enabled by July 1, 2007. This means that operators have to switch out devices in tens of millions of homes and install new card-capable boxes, despite the fact that downloadable security software, which doesn’t necessitate the manufacture of new boxes, is on the cusp of availability.
The expense of manufacturing, installing and serving new boxes could cost the industry $500 million per year and could raise customer lease fees by $72 to $93, NCTA maintains. Moreover, the association thinks the idea of physically separable technology is anachronistic in the digital, downloadable era.
In a letter to Chairman Kevin Martin, NCTA CEO Kyle McSlarrow pointed out that not only will the FCC be forcing the cable industry to spend tons of money on 1990s technology if the 2007 deadline goes into effect, forcing consumers to pay more for their boxes doesn’t jive with the policy goal of transitioning to digital TV, which the government is willing to subsidize to the tune of $40/box.
Moreover, at a time when Congress and the Commission have made the digital transition a national priority, it would surely be one of the strangest policy outcomes that, when the government is preparing to subsidize over-the-air households to the tune of $40 for each digitalto-analog converter, it should simultaneously force consumers to pay $72 to $93 more for leased digital boxes that could help facilitate the digital transition without any government subsidy.
Finally, all this hoo-hah begs the obvious question: are there any consumers out there who are actually itching to buy digital boxes in the first place? As McSlarrow says in his letter
Finally, and most important, is the consumer demanding a higher cost box that requires an additional step (i.e., securing and attaching a CableCARD) to get video service? Of course not. The idea is laughable.
Cynthia Brumfield at 3:44 PM|Comments(0)
Blogs We Read
