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Cable Operators Finally Face FCC Mandate

The Telecommunications Act of 1996 may now seem like ancient history, but its reverberations are still being felt. The law’s framers, for all their flaws as politicians, did realize the lightning pace of telco developments meant there needed to be some flexibility to the regulatory framework.

What they should have been more worried about was how industry lobbying would take advantage of that flexibility, particularly in one area that’s been a bee in my bonnet for the last decade—the digital set-top box.

Now the FCC is finally cracking down. As of July 1, after two full years of granting the cable industry further deadline extensions, the agency is requiring operators to separate two functions that have long been integrated into their proprietary set-top boxes; security, or the process by which a user is authenticated and granted access to services, and navigation.

Though some operators at the deadline were awarded FCC waivers, many of the biggest players, most notably Comcast, must comply.

The shift carries enormous implications for broadband technology development.

WHAT’S ON TAP

FCC Chairman Kevin Martin invokes memories of the rotary phone, saying that government intervention into Ma Bell’s business (which had its own monopoly on the phone) led to “more innovation and lower prices and better quality phones.” The same can be achieved now with cable boxes, he said.

Where was he in 1996? OK, so that’s a rhetorical question. But regulators and industry visionaries voiced the same logic back then, when I wrote a feature story for Computer Shopper (remember how thick that magazine was stuffed with ads? Alas, the tech bubble slimmed it down considerably), forecasting a new era in set-top box development.

Features already on tap at that point included digital video recording, interactive gaming and networked media sharing, all navigated by an intuitive program guide. Even more advanced technologies were on the drawing board, including broadband video sharing.

Along with the act’s framers, I envisioned an open, competitive marketplace that would lead to a slew of retail choices, speeding the evolution of what would come to be called a media center, or some such gaudy gadget. My dreamy fantasy: buy one box, get a digital authentication card from your cable or satellite operator, plug the box into your home network, and Presto!

Back then, there were even several candidates for the media center device. Bill Gates of course touted the PC, with Microsoft at its core. Cable and satellite operators spoke dreamily of partnering with consumer electronics manufacturers and software developers on the next generation of set-top boxes. Console gaming was considered the dark horse in the race.

A decade later, we have Wii, the Xbox and PS3 as our dream machines, replete with media sharing and networking (and they even play DVDs!). We can watch endless YouTube clips and BitTorrent downloads on our laptops. But the digital set-top box has hardly evolved.

Oh, the DVR technology’s in there, all right, as well as video-on-demand.

But, if I want anything approaching what they promised, oh so long ago, I’m either forced to fork over $800 for a TiVo, plus pay a monthly subscription fee, or buy a high-end desktop and plug in an external digital tuner box that takes the cable feed—hardly a simple set up.

Otherwise, I’m forced to put up with whatever set-top box my particular operator leases to me. Their navigation systems, conceived a decade ago, are clunky affairs, bogged down by all the ads they sell that clutter their primitive program guides. On most there’s no way to search for programming. And heaven help me if I want to easily incorporate the box into my home network, play a cool game (or a DVD) or share media.

Instead of an open platform that would have allowed for rapid integration of features and software, and interoperability guaranteeing manufacturer, retail outlet and consumer confidence, cable’s proprietary approach has stifled development. And they’ve gotten away with it through extensive lobbying.

INDUSTRY CLAIMS

The cable industry, of course, has its counterarguments, some valid, some specious.

The most hubristic is the claim some operators have made that consumers don’t want to deal with the hassle of shopping or owning a box that may face obsolescence. So instead they charge us $10 a month to lease our device, then warn that this latest FCC meddling will add more to that cost.

Cable executives and their lobbyists (primarily the National Cable & Telecommunications Association) also argue the regulatory nuisance will unduly delay development and roll out of further advanced services.

One credible point they make is in the area of security, which will now be handled by CableCARDs, operator-supplied plastic cards that authenticate subscriber information and have only been marginally deployed to date.

Operators say a new form of “downloadable security” could be available soon that would be superior to CableCARDs—if only they could dedicate the time and effort to deploying the technology, instead of having to comply with the burdensome July 1 regulatory meddling.

I’ll be intrigued to see if any of these claims prove to be more than mere bluster, and how many years it’ll take before my local Best Buy offers any kind of reasonably priced TiVo alternative. In the meantime, it would be even more intriguing to see what Steve Jobs would do with this problem, now that the iPhone is old news.

Hey, I can dream, right?