Gary Arlen /
02.02.2005 12:00 AM
Policy Debates Shape CES2005
Video takes center stage on exhibit floor

LAS VEGAS

Somewhere between Michael Powell's vow that setting a firm digital TV transition deadline is "going to have to be this year" and Samsung's 102-inch plasma screen, it was clear that this year's Consumer Electronics Show was about television. From Thomson's low-end standard definition TV sets (priced at less than $400 and meeting the FCC's digital tuner mandate) to DAVE-TV, a Chinese-made digital video access device, the halls and suites of rainy Las Vegas throbbed with visions of what tomorrow's television will deliver.

Add enhanced digital video recorders, media centers and portable or mobile TV receivers to the video downpour, too. Not to mention the IPTV (Internet Protocol) buzz emanating from SBC Communications' U-verse debut--the first major telephone company presence at CES.

NO LONGER LAUGHING

Organizers even mounted a conference session with the foreboding title, "The End of Analog." One of the panelists, Rick Chessen, the FCC's DTV Task Force leader, acknowledged that, "A few years ago, a session titled like this would generate quite a few guffaws.

"Finishing the transition this decade is quite remarkable," Chessen said. "The foundation is in place and we can turn our attention to bringing the transition to an end... in a way that is least disruptive to consumers."

His views understandably echoed those of FCC Chairman Michael Powell, who--in a keynote dialogue with Consumer Electronics Association President Gary Shapiro--promised that a final deadline for the transition will be established this year. In response to questions about cable TV's role in the digital transition and its recent request to postpone CableCARD deployment, Powell pointed to the FCC's rules on cable retransmission and signal security.

Cable companies will have to "come up with strong consumer interest arguments to get another" extension, Powell said.

The chairman also declared DTV "a hit," based on what he described as his frequent weekend visits to the TV departments at Best Buy and Circuit City stores. Powell said he has eavesdropped on customers as they "take out second mortgages" to buy HDTV equipment.

Powell's enthusiasm and Chessen's expectations contributed to the CES motif of imminent DTV joy. But just as the storm clouds bubbled over the Las Vegas venue, so did murky messages materialize from other DTV observers.

"The DTV transition is a very complex issue," said Peter Filon, minority counsel to the House Energy and Commerce Committee, speaking on the "End of Analog" panel. "Many policy makers feel the DTV transition has progressed far more slowly than expected."

This year, there will be a push by policy makers to assure the transition will take place," Filon promised. He forecast "possible legislation," noting that Congressional action "has a lot to do with what the FCC does about the [Ferree] plan," which ties DTV penetration to digital cable's reach.

Filon also touched on the controversial subject of a federal subsidy for DTV converters to underwrite receivers for low-income viewers.

"The FCC doesn't have any authority to give out subsidies for set-top boxes," Filon said. He expects that his committee "will hold hearings" this year on "what sort of subsidy program will be workable." Although Filon did not indicate a timetable for such hearings, he said that the committee is awaiting a report from the Government Accountability Office regarding the subsidy program used in Berlin, Germany's fast DTV transition.

On that theme, panelist John Taylor, vice president of public affairs and communications for Zenith Electronics Corp., predicted that the industry would supply "a $50 box" by the 2007 to 2009 period, which "is going to get us a long way" toward fulfilling the FCC's tuner mandate necessary to the complete transition.

GEAR, GADGETS GALORE

While the wonks mumbled about policy tactics in meeting rooms, geeks and retailers rumbled through the sprawling CES venues peering at digital video equipment.

The record-breaking crowd topped 142,000 people--nearly 10 percent more than last year. By general consensus, this year's CES dished up little if any breakthrough technology. But this industry plateau--giving manufacturers and consumers a chance to catch up with the technology onslaught in recent years--was accompanied by a sense of integration, of products being brought into line with consumer appetites, expectations and pocketbooks.

For example, TiVo CEO Michael Ramsay, in several high-profile presentations, emphasized that his company's new "Tahiti" project is focused on portability, the integration of broadcast and broadband reception and the development of a high-definition digital video recorder that is compatible with digital cable-ready hardware.

"DVR is really just the beginning of an exciting technology cycle which will ultimately lead to the revolution of home entertainment," Ramsay said. Indeed, throughout the rambling exhibits, there was a sense of motion--or more literally, a display of portability and mobility. Young companies such as Orb Networks Inc. and Vidiator unveiled services to stream video onto the emerging category of Portable Media Players (PMPs). Orb's $10 monthly service offers live TV shows and home videos. Vidiator President Connie Wong said her company recruited the legendary Stan Lee (creator of Spider-Man), to develop new content for its subscribers.Ê

Toshiba introduced "Symbio," a 160 GB hard drive recorder that can hold up to 16 hours of high definition TV or 80 hours of standard definition video. The device is designed to work with all Toshiba integreated HDTV sets--offering viewers yet another DVR option, without having to purchase a subscription.

GETTING SIRIUS

Elsewhere on the mobile front, Sirius Satellite Radio updated the industry on its plan to transmit video into cars. Sirius had unveiled the scheme a year ago, and now targets summer 2006 as a start date. Subscribers should not expect to receive video feeds from Sirius celebrity Howard Stern, though. Sirius Chairman Joseph Clayton said the first shows will be kidvid programs, to keep the youngsters mellow in the backseat during long trips.

Among the hybrid systems on display at CES was one that could be called "Comcast to the car." Delphi, the automotive electronics company, teamed up with Comcast, the cable giant, to develop a prototype that lets cable subscribers beam specific shows via their home wireless networks into a vehicular DVR, creating a mobile library of backseat viewing plucked from regular cable fare.

The new breed of Internet video services included products from Akimbo Systems and DAVE (Distributed Audio Video Entertainment) Networks. The Akimbo Internet access player, which was unveiled at the last year's CES, but just went on sales for about $200 late last year, is among a small roster of set-top boxes aimed solely at Internet content. Among its CES announcements was a new deal to carry National Geographic television programs. The content joins Akimbo's line-up of thousands of hours of streamed programming, much of it licensed from Time Warner subsidiaries such as Cartoon Network, Turner Classic Movies and CNN, as well as independent content from iFilm, FilmClix and Granada TV (U.K.).

"In 10 years, the Internet may be the most important distribution medium," Steve Shannon, Akimbo founder and executive vice president, said.

HELLO DAVE

DAVE-TV and its affiliated DAVE Network (with 70,000 hours of Web content) are going after a similar market. The $199 DAVE set-top box or the stand-alone DAVE Media Center software (which can be installed on existing computers) also invites independent producers to bring their content to the system.

Convergence and cross-industry deals permeated CES. Microsoft TV (MSTV) turned up as part of the SBC U-verse "triple play" (video/voice/data)--marking a major deployment for the MSTV platform, which had previously been aimed at cable operators. The MSTV interface blends features that had been developed separately for Microsoft's PC-centric Media Center, underscoring the evolution of technologies. Among the features--a buffering system that eliminates the screen going dark for a few seconds at every digital channel change.

Samsung unveiled digital set-top box deals with Time Warner Cable, Brighthouse Cable and Charter Communica3/4tions--three cable deals that would normally have been announced at a cable TV event. The sales could amount to nearly 20 million bi-directional digital set-tops, using CableLabs Open Cable Applications Platform (OCAP). Analysts speculated that the deals could accelerate the beleaguered negotiations for a two-way pact between cable and consumer electronics companies.

TRADITIONAL TV

While the telco and cable presence at CES certainly indicated a direction for this converging industry, there were plenty of traditional electronics offerings.

Samsung seemingly won the size sweepstakes with its 102-inch plasma screen--no price yet divulged. Samsung's 80-inch plasma monitor is priced at $39,999.

Sharp unveiled a 65-inch LCD monitor, but the company is also sticking with DLP technology for other models that are 56- and 65-inches diagonally.

Toshiba--which has had been a big presence in DLP technology--privately showed its new flat-screen format, the Surface- conduction Electron-emitter Display or "SED." The first SED monitors from Toshiba will have 50-inch screens and should be on the market by late this year. The price has not yet been established, although they are expected to cost about the same as similarly sized LCD monitors.

RCA showcased 10 DLP projection models, ranging in size from 44 to 61 inches. All of them can receive high-definition TV pictures. RCA also introduced seven low-end digital TV sets that can only display standard-definition TV; these models have modest 27- and 32-inch screens and cost less than $400.

Elsewhere at CES, the battle raged between high-definition DVD formats (HD DVD Forum versus Blu-Ray) and there was endless talk about copy protection.

In short, CES--predictably--offered something for everyone; if you can afford it.


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