DirecTV Opposition to FCC Gateway Plan Questioned

Democratic lawmakers at a hearing Thursday questioned DirecTV’s opposition to the FCC’s proposal for universal video gateway devices. House Communications Subcommittee Chairman Rick Boucher, D-Va., wanted to know what it would take to assuage DirecTV’s concerns about the FCC’s plans. DirecTV is worried the FCC’s proposal would put it at a disadvantage against cable operators, because satellite TV services can’t rely on a two-way network to offer new services, testified Eric Shanks, the company’s executive vice president of entertainment. All its on-screen features must be built into the box, he said. DirecTV is also concerned that third-party devices could strip away the distributor’s services, he said.

Boucher asked whether DirecTV’s qualms would be eased if it could put the “essential functionality” of its service into the gateway device. Shanks said they wouldn’t. In that case, the gateway device would be DirecTV’s current set-top box, he said. “Our box is as simple as we can make it today,” he said.

Boucher also wondered whether DirecTV’s second concern could be relieved by a provision in the rules that “all of the services have to be passed through” to a third-party device. That would still leave customer-service problems, Shanks said. It was an issue that DirecTV dealt with early on when it had multiple set-top box vendors. “This proposal would turn back the clock, leaving no clear lines of responsibility,” he said.

Rep. Ed Markey, D-Mass., drew an analogy between pay TV operators’ reluctance to support the FCC’s proposal and AT&T’s reluctance to let consumers attach retail telephones to its network years ago. “As the author of Section 629,” which directed the FCC to foster a retail market for cable devices, “I've been waiting for the day when we are all liberated,” he said. The record for the hearing will stay open three weeks so committee members can solicit more information from the witnesses, Boucher said.

Boucher expressed concern about the way cable operators handle switched digital video programming for customers who own TiVo boxes. The tuning adapter solution is awkward, often as large as a set-top box and can be difficult for customers to connect, he said. The cable industry is open to some alternatives, said NCTA CEO Kyle McSlarrow. TiVo has proposed using an IP back-channel to send tuning requests to the cable-headend. “We are open to exploring an IP back-channel that is an open standard,” McSlarrow said. TiVo’s system now is closed system using technology from vendor SeaChange, he said.

Even though the FCC is moving toward video gateways, the agency needs to focus on CableCARD issues now, said TiVo General Counsel Matthew Zinn. “There’s not broad consensus on the gateway approach,” he said. Referring to the National Broadband Plan’s implementation target of a universal gateway in pay-TV operations, Zinn said, “The FCC may say 2012, but I don’t believe it.” Meanwhile, TiVo relies on CableCARD so its users can access pay-TV programming, so those rules need to work, he said. Problems such as TiVo tuning for switched digital video are real, as more programming is moving to that platform, he said. “If there is follow-through from the cable industry on creating an IP back-channel that is not proprietary, that would go a long way,” he said.