Paul Gluckman

Although Microsoft appeared to project a united front with cable when it joined with Comcast and Time Warner Cable to urge the FCC to delay the July 2006 integration ban “for some period ranging from 6 to 18 months,” Microsoft has told the Commission it won’t support a postponement longer than 12 months, sources have told our sister publication Consumer Electronics Daily.

As the CE and IT industries were telling the FCC they “remain steadfast” that the July 1, 2006, integration ban be maintained “as the Commission’s rules require,” Microsoft broke its silence on its downloadable security proposal with Comcast and Time Warner Cable that would delay the deadline for 6-18 months. Microsoft denied it had flip-flopped in supporting the delay, saying its only motive was in supporting innovations like downloadable security that would be future-proof.

“Effective implementation” of the July 2006 integration ban on digital cable set-tops “should not, again, be pushed back,” regardless of any new proposal from Comcast, Microsoft and Time Warner Cable on a downloadable conditional access system (CED Feb 28 p1), the Consumer Electronics Retailers Coalition (CERC) told the FCC in an ex parte filing. CERC members “believe in and support technological progress,” the group told the Commission. However, if the proposal doesn’t accommodate “competitive entrants,” moving to such technology shouldn’t be the basis of postponing the July 2006 deadline, because it would defeat the “very purpose” of the rule -- achieving a “commonly used security interface,” CERC said. Comcast, Microsoft and Time Warner Cable have said a 6-18 month delay in the integration ban is necessary to develop a “common soft conditional access system that would be relied upon simultaneously by all digital cable systems and available in all digital cable products, whether offered by cable operators or CE or IT manufacturers.” CERC said it agrees with CEA that such a system can be made consistent with Commission rules, but only if it’s available to all competitive interests on fair terms and the technology can be deployed “expeditiously.” If cable companies can’t move to the new technology by July 2006, there’s all the more reason to keep the deadline in place, CERC said. “Otherwise, CableCARDs and their users would remain orphaned and isolated,” while MSOs prepare to move from an integrated box that currently doesn’t support competitive products to a downloadable security “regime” that also doesn’t support competitive products, CERC said. The “necessity” of maintaining the deadline has been demonstrated by the fact that previous delays in its implementation have “apparently and repeatedly” caused cable to assign a “lower priority” to CableCARD-capable “competitive entrant devices,” CERC said.

The CE industry reacted sharply Fri. to the disclosure that Microsoft had broken ranks with most CE and IT companies and now supports cable’s effort to persuade the FCC to delay the July 2006 integration ban on digital cable set-top boxes. Microsoft “is out of step with the rest of the CE and IT industries,” CEA Pres. Gary Shapiro told us.

The FCC already has extended the integration ban on cable set-top boxes (STBs) once, and doing so again beyond the July 1, 2006, deadline would “compromise” the ability of technology companies to innovate, Hewlett-Packard Exec. Vp Shane Robison told FCC Chmn. Powell in a letter. “The time has come to end consumers’ exclusive reliance on STBs provided by their cable company,” Robison said: “In fact, it is long overdue.” Nothing has happened since the Commission’s 2003 decision to extend the deadline beyond Jan. 1, 2005 “to justify further delay,” he wrote. Maintaining the July 2006 date is “critical” to achieving the goal of giving consumers “the widest possible range of choices in the market for navigation devices,” Robison said. Without a firm deadline, “parties that benefit from delay and uncertainty could ultimately undermine Congressional intent” in the DTV transition, Robison said. “The current compliance date is also critical to the further development of reliable and innovative functionalities and gives equipment manufacturers and cable operators the appropriate market incentives and appropriate timeframe to develop and deploy swiftly compatible products to the public.”

The FCC launched a formal rulemaking (05-24) to consider the CE industry’s request that it move up the deadline by which all TV sets with 25-36” screens must have ATSC tuners.

The cable industry has installed over 25,000 CableCARDs to date, of which Comcast has accounted for over 12,000, Comcast told the FCC in an ex parte filing. That volume is well below the one million CableCARD-ready DTV products CEA had projected would be shipped by year- end 2004. But Comcast said the cable industry “is fully honoring its commitments to support CableCARDs” and working “assiduously” on negotiations toward a bidirectional plug & play agreement. Those are among the reasons Comcast and other MSOs have cited in urging the FCC to extend or scrap the July 2006 integration ban on cable set-tops over the objections of CE companies. Comcast told the Commission 14 CE makers have been approved by CableLabs, or self-verified for marketing CableCARD-ready products, which now number 161 models.

Sirius CEO Mel Karmazin recently held talks with Apple CEO Steve Jobs about an iPod with a satellite radio receiver built in, Karmazin told McGraw-Hill’s 2005 Media Summit on Wed. in N.Y.C. But Karmazin sought to douse speculation the talks had yielded agreement on such a product, saying Apple didn’t place a high priority on it.

Those that oppose CEA’s petition seeking clarification or reconsideration of V-chip rules for DTV have “completely mischaracterized” the nature of that petition, CEA told the Commission in reply comments. Contrary to statements by the Coalition for Independent Ratings Services that the CE industry wanted to undermine the flexibility in ratings systems the FCC seeks, CEA said its only aim was “to implement this flexibility while maintaining some semblance of usability.” CEA said its request to have the Commission specify the rating region code that activates V-chip operation has been confused by those who believe that CEA’s request would somehow limit the ratings systems that can be transmitted in the rating region table. “Specifying rating region codes in advance has always been the intended approach in the PSIP system” of DTV, CEA said. “Doing so allows the receiver to pull the correct rating information simply by knowing in what region the receiver is operating,” it said. It said DTVs that are compliant with the proposed rules in the U.S. will process 2 ratings codes -- one “locked” to existing V-chip specifications, the other “being completely flexible to process whatever rating region table is delivered in the transport stream.” As for the licensing of V-chip by patent holder Tri-Vision, CEA urged the FCC to accept Tri-Vision’s stated offer to “do whatever is necessary” to assure that license terms are fair and reasonable. TiVo, in separate comments supporting CEA’s petition, urged the FCC to go a step further in assuring that Tri-Vision doesn’t gain a patent windfall at the expense of consumers. It urged the Commission to confirm “that so long as a DTV product is able to process new ratings systems, it need not utilize the same technology or processes protected by the Tri-Vision patents.” TiVo said it believes it can design its own devices capable of accommodating any new ratings systems “that would render licensing of the Tri-Vision patents unnecessary.” It also urged that the FCC protect those companies that have no choice but to license the Tri-Vision patents. “If the Commission endorses a rule where only Tri-Vision legally can produce or license the right to produce compliant devices, the Commission has a special responsibility to ensure that all regulated entities have access to the license on roughly the same terms,” TiVo said.

Cable industry suppliers are working to comply with the July 2006 integration ban on set-top boxes, Comcast told the FCC in an ex parte filing. But unless the rule is changed or the deadline delayed within the next several weeks -- a solution cable has been pushing -- “a large and growing proportion of the finite technical resources of cable industry suppliers and cable operators will need to be dedicated toward meeting that deadline,” Comcast said. It said it was responding to questions raised by FCC Chmn. Powell on how soon cable needed a decision from the Commission whether the ban should be maintained, eliminated or postponed and how cable would use the time if the deadline were extended or scrapped. Comcast said cable already had entered the 18-month window usually necessary to design, test and produce set-top boxes. But efforts to comply with the integration ban “will require diversion of resources away from other matters, such as the development of a next-generation network architecture security for cable services that is reliable, renewable and downloadable and the development of very low-cost digital set-top boxes,” it said. If the FCC grants cable’s request for a delay in the integration ban, Comcast said, cable would use its “continuing support” for CableCARDs during the interim to “further prove that the industry is meeting its commitments to provide and support separate security without having to deprive customers of the integrated set-top boxes that millions of consumers are happy to use today.” Cable also would use the time to continue its intensive work on downloadable security, and might have a “workable” solution in place by year-end if resources aren’t diverted to integration ban compliance, Comcast said. It also pledged cable would use any postponement to work “vigorously and cooperatively” in the 2-way plug-&-play negotiations. “But of course the prospects for progress there are also dependent upon the behavior of many non-cable parties and the business issues being dealt with in those negotiations,” Comcast said.