Paul Gluckman

For every fan who wants more NBA in high-definition at one time or another, “there are others who want more of their particular sports interest” in HD, Bryan Burns, ESPN vp- strategic business planning & development, told our affiliate Consumer Electronics Daily. Through ESPN HD and the soon-to- be-launched ESPN2 HD, “we work to accommodate all interests based on our knowledge of viewer preferences, time of the season and facilities availability,” Burns said. He was responding to Internet reports of fan complaints alleging there has been a dearth of NBA games on ESPN HD compared with other networks, such as TNT. Burns said TNT’s situation “is dramatically different” from ESPN HD’s, “with only the NBA to consider.” ESPN HD will “start to strip” its Fri. night NBA telecasts after Jan. 1, but will “place more focus” on the NBA in the spring when interest is at its highest after the conclusion of the NCAA season, Burns said. ESPN will likely telecast the NBA Playoffs in HD through to the Western Conference Finals, and will produce the NBA Finals in HD “for our friends at ABC,” Burns said. He said “the NBA is handled very appropriately within our overall schedule of ESPN HD and soon to be ESPN2 HD telecasts.” He said there will be an increase in NBA telecasts next year to 300 across ESPN HD and ESPN2 HD from the 180 in 2004, not to mention an overall HD program lineup encompassing over 2,000 programs and 6,000 hours. That’s “well ahead of the demand curve charted by HDTV set sales to this point,” Burns said. “And we'll try to stay ahead of that curve in the coming months and years.”

Over the last 5 years, many major TV manufacturers, most of them CEA members, have acquired V-chip licenses from technology patent holder Tri-Vision International, and those license agreements have been fair, nondiscriminatory and based on reasonable royalties, said V-chip inventor Tim Collings and Najmul Siddiqui, Tri-Vision CEO, in a filing at the FCC. Their filing was to oppose CEA’s petition saying the FCC should monitor Collings and Tri-Vision because they, through V-chip license agreements, were “expecting a financial windfall that television manufacturers, and ultimately U.S. consumers, would have to fund.” Now that V- chips are required in TV sets, “no unreasonable royalty or licensing policies have been brought to the attention of the Commission,” either in the CEA petition or in the proceedings leading up to the FCC’s order, Collings and Siddiqui said. Tri-Vision “will do whatever is necessary to ensure that the terms of the resultant licenses are reasonable, nondiscriminatory and fair and, to the greatest extent possible, mutually agreeable,” the filing said.

There’s “no validity” to cable’s claims that FCC adoption of plug-&-play rules undermines or displaces the need to stick to the July 2006 ban on set-top boxes with integrated security, said the CEA in an ex parte filing at the FCC. It offered a point-by-point rebuttal to arguments made recently by the cable industry in its stepped-up campaign to convince the Commission to extend or waive the July 2006 deadline.

The CE industry petitioned the FCC to move up the deadline by which all TV sets with 25"-36” screen sizes must have ATSC tuners. CEA and the Consumer Electronics Retailers Coalition (CERC), in a joint petition, asked that the July 2006 date by which all such receivers must have DTV tuners be moved up to March 2006 and that the July 2005 date by which 1/2 the sets must be ATSC-capable be eliminated. They cited unforeseen and “unduly disruptive” consequences of the Commission’s phase-in schedule.

Motorola told the FCC leaving in place the July 2006 ban on integrated cable set-tops with embedded security would “substantially increase equipment costs for consumers.” The company was rebutting CE claims that lifting or postponing the ban would be anticompetitive. In an ex parte filing, Motorola said there was evidence in the record that a CableCARD-Host combination would cost a cable operator $71-$93 more than an integrated set-top with the same abilities. Motorola, with Scientific- Atlanta, has been a main supplier of CableCARDs. The 2006 ban would “stymie” development of a low-cost digital-to- analog set-top by adding substantially to the cost of such a device, Motorola said. “Congress and the Commission have recognized the importance of such low-cost devices to the digital transition,” the company told the FCC: “Raising the cost of these devices will undermine their appeal and thereby slow the transition.” Motorola said the ban also would be harmful because: (1) It would force all cable customers to bear additional costs, “even though the enhanced portability of CableCARD-enabled devices provides no added value” for customers who prefer leasing their set-tops because those boxes stay within a cable system. (2) It would remove a “cost-effective choice for consumers” who prefer to lease set-tops, although others may want to buy a CableCARD-enabled TV at retail. “The best public policy is to continue to let consumers make the equipment choice that best fits their needs.” (3) It’s unnecessary to foster a retail market for CableCARD- enabled products. CE makers are rolling out dozens of such products this year and expect to sell a millionin coming months, “even in the absence of a ban on integrated devices.” Motorola said it was “facilitating the development of a competitive marketplace” for integrated set-tops. Having licensed its conditional access technology to Pace, Panasonic and others, Motorola said, there’s “nothing to prevent the emergence of a retail market for such integrated devices.” The company said Shaw, Canada’s leading MSO, has successfully pursued a retail strategy for its integrated set-tops, and “secondary markets for such products have also developed through mechanisms such as eBay.” Claims that there are large-scale technical problems with the CableCARD are “overstated,” Motorola said, apparently in response to recent CE claims of “numerous technical implementation problems” preventing CableCARDs’ proper operation. As with any new product such as cable modems, “some glitches can be expected,” Motorola said. “But the cable and CE industries are committed to working to resolve any potential issues as was done, for example, with cable modems,” it said. Motorola said it fully supports ongoing talks to reach an agreement on bidirectional CableCARD devices. But like others, it said the negotiations had become bogged down by the “complexity” of the issues and the large number of participants. “At the very least, the Commission should afford the parties additional time to work through these issues so that an optimal, mutually agreeable 2-way standard is adopted,” Motorola said. But leaving the integration ban in place could cause the negotiations to break down and lead to the development of a “suboptimal” standard on 2-way or competing, mutually incompatible standards,” it argued. “That would be a bad result for consumers and all concerned.”

XM Satellite Radio tried to regain the attention that had focused on rival Sirius’ signing of Howard Stern, using the announcement Thurs. of 3rd-quarter results to remind Wall St. that it, not Sirius, was “the satellite radio leader in subscribers, technology and content.” XM’s net loss fell to $118 million from $133.5 million, and revenue doubled to $65.4 million from $26.9 million. XM is “on pace” to reach its previously stated goal of 3.1 million subscribers by Dec. 31, CEO Hugh Panero told analysts. The company added 415,671 subscribers in the quarter, for a total of 2,516,023, up 167% from the end of the same 2003 quarter. Panero said XM still accounts for 80% of all subscribers in satellite radio, has the “most compelling” content and is “virtually alone” in its domination of the OEM business. Moreover, XM in the quarter captured 2 of every 3 new subscribers in the retail aftermarket, which Sirius is targeting, Panero said.

Sirius won’t rule out a buyout of Howard Stern’s contract with Infinity Bcstg. to push up his satellite radio debut ahead of Jan. 2006 date planned, senior Sirius executives told financial analysts Wed. in the company’s quarterly conference call. Infinity officials wouldn’t comment. Sirius CEO Joseph Clayton said a buyout was one of 3 scenarios. Another “possibility” involving Stern is that Infinity could “chase him off the air,” Clayton said in response to an analyst, but he added that was “highly unlikely,” given that Stern’s ratings have soared since the Sirius announcement. A more likely possibility is Infinity’s letting its relationship with Stern “go on as is” until their contract expires at the end of 2005. As for a possible buyout, Clayton said: “If it’s in the benefit of Howard Stern, Infinity and Sirius Satellite Radio that something could be worked out earlier, that’s a possibility as well. But there are a lot of moving parts and it’s too early to comment on any of the above.” Asked whether Sirius anticipates more programming agreements as significant as those with Stern and the NFL, Clayton said other “properties” had aroused the company’s interest but nothing “on the magnitude of what we've seen over the last several weeks.” Clayton hailed Sirius’ 3rd quarter ended Sept. 30 as the most “eventful” in the company’s history. It was also the most successful in subscriber growth, he said. About 182,000 subscribers were added in the quarter, including 69,000 in Sept. alone. The company finished the quarter with 662,000 and broke 700,000 on Oct. 18. Sirius remains on track to reach a million subscribers in 2004, he said. Buoyed by the Stern announcement, Sirius brand awareness has reached 45%, and customer satisfaction 93%, Clayton said, citing industry surveys. Monthly churn reached “a new low” of 1.5% during the quarter, CFO David Frear said, and Sirius expects to finish the year with churn at the low end of the 1.7%-1.8% range predicted earlier. Subscriber acquisition costs (SACs) per gross activation fell to $229 in the quarter from $234 in the 2nd quarter, and were lower than had been forecast, Frear said.

Multi-industry meetings continue on bidirectional plug-&-play set tops, but “I can’t even begin to guess” when there might be an agreement, Brian Smith, of Philips, Cable Working Group chmn., told the CEA Video Div. Tues. at the CEA Industry Forum in San Francisco. As for unidirectional plug-&-play, Panasonic’s Peter Fannon, CEA Video Div. chmn., told us the “experience” of rolling out CableCARD-ready products “in general has been very good in most places.” Still, Fannon said, CE will continue to press its case at the FCC and elsewhere that digital cable ready DTV products be made “fully competitive.” CableCARD problems generally have been “resolved promptly,” Fannon said. He said he’s sympathetic to cable, because CableCARDs afford “a raft of very complex issues.” But at the same time, he said, “there shouldn’t be any issues that aren’t insurmountable.” Moreover, he said, cable had “6 years’ notice” to get CableCARDs right.

Sirius’ deal with Howard Stern has “the potential” to defy Wall St. analysts and ultimately give the company the lead in satellite radio subscriptions over rival XM, Sirius CEO Joseph Clayton told Consumer Electronics Daily. But referring to the 2nd-place DBS company and its CEO, Clayton added: “I also think we can be very successful as number 2, just like Charlie Ergen and EchoStar.”

The FCC exceeded its statutory authority by enacting broadcast flag requirements for DTV despite Congress having “specifically withheld” power from the Commission to control TV receiver designs, plaintiffs told a federal appeals court Mon. In an opening brief filed at the U.S. Appeals Court, D.C., a coalition of 9 consumer and education groups asked the court to set aside FCC’s broadcast flag mandate (CED Feb 5 p2).