Heading off a potential FCC debacle

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dewayne Hendricks <DEWAYNE () WARPSPEED COM>
Date: September 22, 2006 1:11:10 AM GMT+02:00
To: Dewayne-Net Technology List <dewayne-net () WARPSPEED COM>
Subject: [Dewayne-Net] Heading off a potential FCC debacle
Reply-To: dewayne () WARPSPEED COM

Heading off a potential FCC debacle

By Randolph J. May
<http://news.com.com/Heading+off+a+potential+FCC+debacle/ 
2010-1047_3-6117902.html>

Story last modified Thu Sep 21 12:01:59 PDT 2006

A decade ago, Congress decided cable companies and their competitors  
should allow consumer electronics manufacturers to make "plug and  
play" set-top equipment that would work with any cable or direct- 
broadcast satellite service. Rather than leasing it, consumers could  
buy such equipment from multichannel video program distributors.

So it was that Congress authorized regulations in 1996 to ensure that  
equipment used to access multichannel video programming would be  
available at retail from entities unaffiliated with cable or direct  
broadcast satellite service operators.

Congress' goal may have made theoretical sense then in the staid,  
still fairly monopolistic world that characterized analog  
communications. However, the rapid changes in technology and the  
marketplace spurred by the digital revolution require that the FCC  
revise its equipment regulations, or their costs to consumers will  
far exceed their benefits.
With a firm digital-TV transition date, it is counterproductive to  
deter consumers from switching by raising their price.

First, some history.

In 1998, the FCC directed the cable industry to develop a physical  
device--now called a CableCard--containing the security functions  
that could be inserted into the equipment of independent manufacturers.

That made sure that their boxes could be used with cable systems  
around the country. The FCC thought that this separate security  
device would allow multichannel video program distributors to retain  
control over the security function while enabling independent  
entities separately to market navigation devices.

The cable industry has so far supplied about 200,000 CableCards for  
use in more than 140 models of digital cable-ready devices. But the  
vast majority of cable subscribers continue to use equipment leased  
from their cable companies.

The FCC went further. In 1998, it required that all multichannel  
video program distributors stop selling or leasing new devices that  
integrate both security and nonsecurity functions by 2005. This rule  
meant that all equipment used to access cable services would rely on  
common technology--like the CableCard.

However, the agency exempted from this integration ban multichannel  
video program distributors that support the use of equipment  
available in unaffiliated retail outlets and that operate throughout  
the United States.

Direct-broadcast satellite service providers were the only  
multichannel video program distributors that qualified for the  
exemption. That's because the FCC found that, unlike cable  
subscribers, users of direct-broadcast satellite services could buy a  
device and use it anywhere in the country. Thus, cable operators were  
covered by the ban, while their principal competitors were not.

The pace of technological developments has only accelerated since  
1998. In March 2005, the FCC extended the integration ban  
implementation date to July 2007. Now the FCC again is considering  
requests by cable operators to extend the date. But since the last  
extension, the landscape has changed even more dramatically.

[snip]

Weblog at: <http://weblog.warpspeed.com>



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