iTV Rivals Unite to Promote Future

Nine companies form council to clarify interactive issues
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Nine companies form council to clarify interactive issues

WASHINGTON

Members of the small but steadily growing interactive television industry took a step to strengthen their position late last year when representatives from nine companies formed the Interactive Television Council.

Last year Kent Walker, general counsel of Liberate Technologies, which makes iTV software and middleware that support a range of set-top boxes and applications, began sharing the idea that representatives of the iTV industry needed to meet and pool some of their efforts.

"Liberate wanted to see the industry have an independent voice in public policy matters," says Walker. "There is a growing community of companies that work in interactive television and enhanced television, but there wasn't a public policy group for servicing those concerns and interests." He contacted the ITAA about identifying companies that might be interested in forming such a group.

"The impetus came from Kent, Scott Maples at Microsoft, Jesse Berg at OpenTV, and others," said Carol Henton, the vice president of the ITAA's Western region. They worked together to "cast a wide net looking for prospective members, and came up with nine who've joined as founding members. Since then we've talked to other companies, and it looks like we'll get another six or seven soon."

The group will operate under the auspices and with the assistance of the Information Technology Association of America.

UNINTENDED CONSEQUENCES

The current members are Liberate, Microsoft, OpenTV, TiVo Inc., Canal Plus Technologies, Concurrent Computer Corp., MetaTV Inc., SONICblue Inc. and TeleCruz Technology Inc.

"This group is intended to provide advocacy, education and an opportunity to work together on issues of common concern, where appropriate," says Walker. "When you have a new technology like iTV, regulators and Congress are often tempted to be reactive, to act without the full context of what's going on, not knowing how technology really operates. One thing I hope we can do is educate regulators and Congress before things occur, so if there are to be new regulations and laws, they'll be informed and affirmative rather than reactive."

"When competitors in an industry get together, usually there's a specific looming threat," says Mark Uncapher, the senior vice president and counsel at ITAA for the Internet Commerce and Communications Division, of which all the iTVC members are part of. "There is a threat of unintended consequences right now from regulations that might have an adverse impact on iTV. We needed to have an early warning process to prepare for and respond to challenges. It's wise to lay the foundation for these issues, but it will be difficult to get any attention from regulators because there's really no large iTV business yet."

The ITAA is providing staff and resources to cover topics of interest to the council, which hopes to use those resources "to promote the development and deployment of these technologies and related services in order to enhance the TC consumer experience," according to group's joint opening statement.

Some of the companies banding together - Microsoft and Liberate, for example - may be better known for battling each other in court or the marketplace than for forming an alliance. April 2, Liberate CEO Mitchell Kertzmann told a federal judge that Microsoft would probably stifle new interactive software it saw as a threat to its dominance in operating systems.

"At the end of the day, the group hopes to become an advocacy arm for the iTV technology industry, " says Maples, a senior attorney at Microsoft for the Microsoft TV platform and TV Services. "Whether that will take the form of lobbying, friend-of-the-court briefs, education of consumers, legislators and regulators is hard to say yet. We don't want to bite off too much too soon with an infant organization." Microsoft TV is a family of standards-based, client and server software products that enables the delivery of interactive TV services through cable, terrestrial and satellite networks. The TV Services group at Microsoft is a provider of advanced interactive television services to consumers.

UP-AND-COMERS

The resources of the ITAA and the combined efforts of the council will be particularly useful to up-and-coming corporations.

"Most of us are very small start-up companies, and we don't have the Washington presence or resources to follow everything that is going on in the policy front, or weigh in with an organized or authoritative voice," says Matt Zinn, a vice president, general counsel and chief privacy officer at TiVo, which designs digital video recorders and operates a service that allows consumers to record programming on a copyright-protected hard disk and watch the shows at their leisure later. "This is a way for smaller companies to know what's going on and to weigh in."

Though the council has no immediate front-burner issue, the group and the companies are on the watch for difficulties on the horizon.

"For instance, what is iTV really like?" asks Uncapher. "Is it like a telephone service, or cable or a VCR? One of the challenges is helping people make sense of the existing legacy regulations. We don't want any of those to foreclose on opportunities for customization and expansion. Then there's the treatment of privacy, where there are state issues in terms of regulating privacy and Internet commerce."

"North America is on the cusp of significant iTV deployment," says Walker, "and I'm increasingly confident that satellite and cable companies are interested. There will be increasing public attention, and we want to make people aware of the benefits. We're also dealing with the fact that the market for cable and telecommunications deployment is a heavily regulated environment. To the extent that we can work with the regulations, we want to avoid a slow deployment."

"TiVo is concerned with any legislation that restricts a consumer's right to view programming of a pay-per-view nature whenever they want," says Zinn. He cites a the Consumer Broadband and Digital Television Promotion act, sponsored by Sen. Ernest Hollings (D-S.C.) and Ted Stevens (R-Alaska), which could prevent consumers from watching some programming outside certain time periods. "The Hollings bill preserves windows created by entertainment companies for their own purposes. Market forces should be what controls these issues, not legislation. Once the FCC gets involved, the government regulates what consumers can do, and that restricts innovation. We believe in preserving and respecting copyrights, but it's our view that, if you pay for programming, you should be able to watch it whenever you want."

"There are also two main bottlenecks for iTV," he observes. "You need to get a programmer to carry the tags that trigger interactivity. Then you need to get the cable or satellite carrier to accept the tags and pass the programming on to the consumers. They wield large interests that may be different from iTV interests. If either the programmer or the distributor blocks those triggers, consumers won't get the interactive functionality provided by iTV companies. Hopefully that's something the council will get into."