Hollywood holds key to cable plug-and-play success

For all the hoopla over the pre-holiday agreement that seeks to make cable television hook-ups more user-friendly by 2004, the hard reality is that there will be no genuine deal until the fat lady sings.

The fat lady, of course, consists of the powerful "fat cats" that run the Hollywood motion picture and television studios. The Consumer Electronics Association (CEA) and cable operators (led by the National Cable & Telecommunications Association) reached their long sought agreement without a delegation from Hollywood at the negotiating table.

In order for the deal to work and be in effect by 2004, the FCC must take a series of actions, some of which Hollywood's studios might oppose. Officially, the Motion Picture Association of America said it has not yet reviewed the agreement and therefore has no comment.

However, if Hollywood chooses to go along, it will have to soften some previous positions on the controversial issue of copyright protection and viewer rights. The proposed agreement would allow consumers to make at least one copy of most programs, with the main exception being those delivered via pay-per-view and video-on-demand services. Nervous studio executives, long paranoid about home recording, must now go along with a less restrictive system than they have publicly demanded in the past.

Take, for example, the scrambling of HDTV signals. The new proposal would effectively bar cable and satellite operators from encrypting the signals all the way to the TV set. The studios and networks have previously demanded end-to-end encryption even though such a system would prevent older analog HDTV sets from displaying certain HD programming. Now, they would have to give up that demand.

Another hiccup could come from direct-to-home satellite operators. Cable executives finally agreed to many limits on the security measures they can impose, but only if the FCC imposes the same limits on satellite operators. That way, cable operators wouldn't risk losing programs and customers to their top competitors, Hughes Electronics’ DirecTV and EchoStar Communications’ Dish Network. However, those satellite operators were also missing at the negotiating table.

There is no deadline for a response.

For more information visit www.ce.org.

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