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.Posted by Cynthia Brumfield at 3:44 PM | Print | Comments (0)
The free Wi-Fi network offered by Google in its hometown of Mountain View has gone live. But don’t look for the search giant to go nation-wide with its broadband wireless agenda. The New York Times’ John Markoff has this piece today noting that Google has said no to jumpstarting wireless competition to incumbent broadband providers beyond its deal with EarthLink to deliver wireless services in San Francisco.
Not that Google wouldn’t like to see a third broadband pipe into homes; it would make net neutrality a moot issue.
“I think there wouldn’t be a Net neutrality debate in this country if we really had a competitive environment for access,” said Chris Sacca, a Google executive who heads special initiatives for the company. “The Internet is not pervasive as it could be, or democratic.”
There are roughly 300 open contracts for municipal Wi-Fi services around the country, and Mr. Sacca noted that Google had not been an active bidder for any of the contracts, including a plan for a service covering the greater San Francisco Bay Area.
Om, who broke the story on Google’s interest in Wi-Fi, quotes Sacca as saying that Google just wants to be a “catalyst” in showing how easy it is to mount competition. The network cost Google $1 million to build, for a city of 72,000 residents, a cost level that Google says is a low barrier to entry.
Posted by Cynthia Brumfield at 9:39 AM | Print | Comments (0)
After a gung-ho start, a joint venture of DBS providers DirecTV and EchoStar are seemingly backing out of the competitive bidding for advanced wireless spectrum. After making a deposit of $972 million and vigorously competing for the valuable resource in the first few rounds, a venture between EchoStar and DirecTV hasn’t made a bid in the last five rounds.
The apparent disappearance from the bidding of the two satellite TV companies, which desperately need a terrestrial network to offer high-speed and voice services to compete with cable and phone rivals, raises the question: what next? Expectations are high that the two rivals, which continually flirt with merging with each other, will try to cut a deal with other broadband wireless companies, including Mobile Satellite Ventures or newly-flush Clearwire.
DirecTV hinted as much in a statement
“Due to FCC auction rules we can’t comment other than to say that we are continuing to pursue a variety of options that will enable DirecTV to provide a broadband service to its customers nationwide,” said Robert Mercer, a spokesman for DirecTV, which is controlled by Rupert Murdoch’s News Corp.”
After the 16th round of bidding, T-Mobile leads the way in terms of licenses, with bids of $2.6 billion for 45 licenses. Verizon Wireless, however, has bid the highest dollar amount, $2.8 billion for four licenses. A cable-backed venture consisting of Time Warner, Comcast, Cox and Brighthouse Networks has maintained bids for 49 licenses at $550 million.
DBS providers had better move quickly in coming up with a broadband plan — according to a study released today by J.D. Power and Associates, cable operators are gaining ground with their digital TV services and are eating away at the customer satisfaction advantage that satellite providers have held.
Posted by Cynthia Brumfield at 8:46 AM | Print | Comments (0)
Blogs We Read
