Cable, CE Interests Rehash Arguments in CableCARD Replies

Cable and CE interests used replies this week in the FCC’s rulemaking into how to level the playing field for retail-based CableCARD devices (CED April 22 p3) by rehashing familiar arguments in the years-old CableCARD debate. Cable and other pay-TV providers renewed their call for an FCC waiver from CableCARD rules for digital tuning adapters (DTAs). CE companies urged the commission to reject a “blanket waiver” on DTAs and to go slow on any such exemptions until the “true cost” of CableCARD “alternatives” can be established.

Comcast and “the rest of the cable industry have dedicated substantial resources in support of CableCARD devices,” the cable operator said. “The marketplace for these devices has not developed as the Commission expected, but that cannot be attributed to lack of cable industry effort,” contrary to the claims of CEA, the CE Retailers Coalition and others, it said. Notwithstanding the “substantial, good-faith efforts” of the cable industry, retail CableCARD devices “have not been popular among consumers,” Comcast said. “CE interests do not explain, nor could they, how adding significant new CableCARD mandates will change that fact, particularly in the absence of any commitments by CEA and CERC actually to build such devices and stock them at retail stores."

Over the long history of the CableCARD debate, the FCC repeatedly granted the cable industry the CableCARD delays it sought on “industry pledges … that vaporized once the delays were secured,” CEA and CERC said in a joint filing. “The result, coupled with a lack of enforcement against discriminatory installation and pricing, was the withdrawal of every CableCARD-reliant television from the market.” To “prematurely end” CableCARD rules “before the industry has been forthcoming about the actual costs of CableCARDs and has shown a true commitment to their support, would be to compound earlier Commission mistakes -- just as new categories of CableCARD-reliant products seem ready to emerge,” CEA and CERC said.

Comments in the rulemaking “affirm that there is no impediment, other than operator and vendor business reluctance, to adopting and implementing expeditiously the regulatory provisions as to which the Commission invited discussion, and for which CEA and CERC have proposed language,” TiVo said. The “fixes” to the current CableCARD rules that TiVo and others seek “are simple and straightforward,” the company said. They include “universal” cable operator support of consumers’ ability to self-install CableCARDs and a ban on “discriminatory” pricing against subscribers who opt for a competitive set-top box, it said. TiVo also wants “universal” availability of multi-stream CableCARDs, also called “M-Cards,” it said. Only one cable company, Cox Communications, has vowed to ban discriminatory pricing for subscribers who opt out of a cable-leased set-top, CEA, CERC and TiVo said.

But the CEA/CERC and TiVo comments “are notable for what they do not say,” NCTA said. “Time and time again, they claim that the retail market has failed but their proposed remedy is always more and more mandates only for the cable industry, and not themselves” or other pay-TV providers, it said. In devising CableCARD rules, Congress directed the FCC “to assure the development of a retail market. It did not tell the Commission to force the cable industry to single-handedly create that market all at its own expense, without a single commitment from CE manufacturers, retailers, or other MVPDs. Where are CEA’s proposed rules that would require manufacturers to build set-top functionality into their devices, or to provide adequate customer support? Where are CERC’s proposed rules that would require retailers to carry CableCARD-enabled set-top boxes?"

Of all the “many reasons” why a retail market for CableCARD devices “has not been successful,” NCTA said, “it is not for lack of support for CableCARDs from the cable industry. CEA/CERC and TiVo’s proposed rules here would not address the fundamental issues limiting development of a retail market. Indeed, even if the Commission did everything they asked, not a single manufacturer in comments has committed to build new types of retail navigation devices, nor is there any clear evidence presented that more consumers would buy retail devices. For these reasons, this proceeding cannot be expected to cure all of the failings of the retail market. Nor should it."

Verizon agreed with cable interests in urging the FCC not to adopt new CableCARD mandates. The commission “has already recognized the shortcomings of the CableCARD regime and determined that it represents a largely failed experiment,” the telco said. The development of “more effective, market-based solutions are already well underway, and the Commission should learn from its experience with CableCARDs that mandating the use of particular technologies does not work,” it said. “Instead of requiring providers to divert time, money, and resources towards supporting dying technologies, the Commission should encourage the ongoing consumer-driven marketplace developments that will ultimately achieve the goals of Section 629 in ways that technology mandates could not.