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Martin's CES Comments Showcase Digital Industry's Growing Challenges

FCC Chairman Kevin Martin's remarks on a wide range of media, technology and telecommunications issues reflected the diversity--and confusion--at this week's International Consumer Electronics Show. With digital TV, copyright, mobile video, network neutrality, broadband expansion, digital radio and dozens of other topics on the FCC's--as well as products on the sprawling exhibit floor--CES itself, as well as Martin's viewpoints, offered a chaotic snapshot of an exploding industry.

Or more precisely a growing array of digital businesses. The video, audio, communications and content industries on hand at CES face technical, financial and marketplace challenges along with the vast opportunities and optimism that fuels the show and its 150,000 attendees.

Martin's headline revelation that the FCC will not grant any more blanket waivers to large cable TV operators (he cited Comcast), which are seeking to avoid deployment of CableCARD devices, was greeted with predictable dismay by cable lobbyists in the room. The FCC chairman stressed that it is "important to find a way to move forward" on the plug-and-play/downloadable security issue.

To the joy of CEA President Gary Shapiro, who conducted the on-stage interview with Martin, the FCC chairman specified that he wants to find that solution in time for the Christmas 2008 selling season so that "consumers are able to take advantage of what we're seeing on the floor."

His reference was a reminder about the avalanche of digital TV equipment in the exhibit halls. On the high-definition TV front, the size race continued, with Sharp's introduction of a 108-inch liquid-crystal display screen--about five inches larger than the previous champ. Throughout the halls, HDTV vendors focused on their 1080p format displays.

Meanwhile, Sony brought forth a 27-inch prototype Organic Light Emitting Diode monitor, far larger than the handheld-device OLED screens of previous shows. At the same time, the much-hyped SED (Surface-conduction Electron-emitter Display) monitors, which Toshiba and Canon featured last year, were completely absent. The companies said the technology remains too expensive as plasma and LCD prices plummet. The SED retreat was a reminder of the fickle factors that direct the industry.

Martin's other comments demonstrated the interplay of policy issues and business development. Amidst his comments about the February 2009 Digital TV transition (which he believes "is going to create confusion on behalf of the consumer," requiring FCC involvement in the education process), the chairman discussed the "white space" challenge.

"We can't do it [allow use of unlicensed devices] in a way that will interfere with broadcasters while we're in the midst of the transition," Martin said, promising to "clarify" the situation, but offering no details. He stopped short of answering Shapiro's question about how to use field experience to ascertain the extent of interference.

Martin also sidestepped specifics regarding the much-rumored DirecTV/EchoStar and XM/Sirius satellite radio mergers. In both cases, he insisted that the commission will access "conditions at the time of merger proposals." Regarding DBS, Martin acknowledged that telco's entry into the TV delivery sector means that the marketplace is changing "dramatically," which may affect the FCC review.

Again, Martin's remarks about telcos was a reminder of the growing impact of Internet Protocol TV (IPTV), which was on display at many CES venues. Meanwhile, Verizon Wireless's announcement of a pact to carry the Qualcomm MediaFlo video feeds via new mobile phones offered another reminder of the diverse ways in which media are expanding--and regulators are hustling to keep pace.

--Gary Arlen