Sony, TiVo, NCTA and others chime in on CableCARD's replacement

The FCC has been unsuccessful in spurring competition in the set-top box market since Congress passed a law requiring changes in 1996. The current situation is exactly why we don't see some of our favorite companies making cable compatible devices -- remember when just about every electronics company made a VCR? CableCARD is a failure because, among other reasons, it is expensive to implement and requires the customer give up certain aspects of their service, like video-on-demand and guide data; on top of that it is a cable only solution and some people prefer satellite TV. And so after giving the market all this time to work out a solution, the FCC issued an Notice of Inquiry (NOI) in an attempt to devise a new mandate that would make give you as many options for a DVR as you have for something like a smart phone. An NOI is just one of the first of many steps on the way to new rules, but the comments do give us a great picture of where each party stands.

Two sides are clearly forming with Sony, TiVo and the Consumer Electronics Association leading up one side and the National Cable & Telecommunications Association (NCTA), its members, and satellite providers on the other. To sum it up the consumer electronics companies make suggestions for an IP video gateway nick named AllVid, which they hope will bring consumers choice in both hardware and software without having to change providers or sacrifice features. And on the other side, they believe that things are just great the way they are and that innovation is happening. They go on to describe how the plans in the NOI will not only fail to spur innovation, but will actually be detrimental to providers and consumers. Then just for good measure, they explain why the FCC doesn't even have the authority to mandate such things.

The entire thing is an interesting perspective into how the Executive Branch of our government works, and while it'll be some time before we are impacted by the outcome, we went ahead and laid out the highlights of a number of the comments after the break so you can play FCC commissioner at home.

Sony: The comments were in favor of AllVid and explains how current market results in a incompatibility between providers and that there is a lack of true competition. Then went on to explain six important points for success, as well as why CableCARD failed despite Sony's support. Specific suggestions include the fact that the gateway should only require the six stream gateway and not the dual stream adapter. The gateway should be a DLNA certified Digital Media Server (DMS). Wired Ethernet and MPEG2 with AC3 should be required, but other network technologies like Wifi and MoCA should be permitted. DTCP encryption is the DRM of choice and that the gateway shouldn't include an ATSC tuner. The FCC should not prohibit optional (emphasis theirs) remote user interfaces like RVU, and that program meta-data is an integral part of the service and should be included in the gateway's services.

Panasonic: Panasonic loves DLNA and believes it should be required, along with H.264 support and DTCP DRM. while bi-directional communication should be required, Panasonic was still on the fence about specific bi-directional service requirements like video-on-demand etc. Then it proposed that the FCC wait and see if CE and operators can come to their own solutions, like RVU and EPG access. The gateway should be able to receive remote-control commands from client devices. Cable providers boxes should have a "common reliance" on the gateway by July 1, 2013 (this means a set-top you get from the provider should relay on the gateway too). The gateway must provide access to linear and SDV content without requiring tru2way or other middleware, but the use of tru2way or other middleware to access to PPV, VOD or other bi-directional content should be optional.

TiVo: There should be a demarcation point between proprietary provider's technology and client side standards. TiVo doesn't think the FCC should abandon CableCARD until after a replacement is well-established and successful. The intent as TiVo puts it, is that "the gateway solution puts retail client devices on an equal footing with leased client devices." One specific suggestion, that won't go over well, is that "all client devices, including new MVPD leased devices, rely equally on gateways for all services" -- we understands that providers want to do their own thing, but also agree that if the provider's boxes don't also rely on the gateways, they won't be well supported. TiVo thinks that 2 or more tuners should be required and that a physical interface and guide data are essential to success. One no brainer that Google also mentioned is that the gateway needs to have the ability to search video-on-demand. TiVo believes that the providers should offer multiple models of gateways with different abilities; like maybe more tuners, transcoding, cache storage, etc. And finally "compliance with necessary standards should be independently determined and certified." It did concede that it understands that the purchase screens need to be rendered by the provider, but suggested that ordering of services should be framed in the client's UI, rather than taking over the entire screen.

NCTA: The main gist of the NCTA's comments is that there is already competition and the video options are exploding and that cable is already working towards the goals without regulations (DLNA, MoCA, DECE, TV anywhere, gateways, tru2way). It believes that "the Commission (should) leave industry with the flexibility to test and use diverse solutions that can adapt to rapid changes in technology, competition, and consumer demand" -- it really makes us roll our eyes every time we hear the NCTA mention consumer demand, competition and rapid change; three things that are obvious its members don't understand. The comments plea with the the FCC and that it "should not impose artificial constraints on the development of a variety of approaches and devices in the name of "common reliance."" The "AllVid approach outlined in the NOI strives for the right outcome but fails to account for how constraining innovation will harm consumers." The NCTA believes that "the NOI suggests unworkable (and unlawful) elements of disaggregation and disintermediation of the cable business" -- we just love this one, this basically means that providers don't want to be dumb pipes and if it doesn't control the user interface, then providers will go out of business. Some of the reasons mention were that it doesn't offer adequate protection and it doesn't protect the guide data (which is licensed with restrictions). But saying that isn't enough, the NCTA went on to say "This approach is beyond the bounds of Section 629 (the law that gives the FCC authority on this matter) as well as other provisions of the Communications Act delimiting Commission authority over the provision or content of cable services."

After all that negativity, the comments go on to describe suggestions for the gateway if the FCC can't be swayed to give up on the idea. Like the fact that "AllVid interfaces must enable networked devices to receive a provider's user interface for interactive services" -- this is the same reasoning that got us tru2way which prevents a 3rd party DVR from offering Netflix streaming in the same UI as the provider's video-on-demand; basically it means the provider needs to control the user interface, not TiVo, Google, or anyone else. It also believe that RVU is ill-suited to cable's more interactive architecture -- ha, what else can we say when a cable calls its architecture interactive? Other remote user interfaces like CEA-2014-A and HTML5 are examples of more appropriate.

MPAA: The group we love to hate starts on the party line about how there's lots of consumer choice and goes on to list "tru2way, DECE,4 Keychest, the TV Everywhere initiative,5 iTunes, Netflix, Hulu, Xbox Live Marketplace, PlayStation Store, and Amazon" as evidence of its point. Then continues on to say that adopting the rules in the NOI will harm consumers and that DTCP-IP is not enough DRM (a CableLabs approved DRM to protect content on a home network). There isn't much the MPAA does like about the idea and takes issue with the choice of Ethernet for video, and proposes something like HDMI instead. It does not believe that the proposal takes into account the content deals between Hollywood and the providers. It worries that if you let cable content be displayed with other content, it might be listed with pirated content which will cause consumer confusion. Basically it is all hate and no concrete proposals to spur competition in the set-top box area.

Verizon: No regulation is necessary we're already innovating, and besides, the commission doesn't have the authority. Verizon goes on and on about its innovation without regulations ignore its pitiful 160GB HDD and 4x3 UI on its own DVR, wow.

CEA: This group is of course on the consumer's side since it sells us stuff we want. Like TiVo and Panasonic, it believes the newly acquired provider set-tops should also rely on the gateway, but thinks there should be minimum, optional, and reserved functions and capacities. It maintains that "the rendering and display of Guides, as well as of all programming, are client-side, rather than MVPD gateway, functions" -- this is to refute the NCTA's position that providers need to control the user interface. Echoing TiVo it goes on to say that "standards reliance of competitive client devices can and should be independently certified" and that "to put, e.g., CableLabs in charge of the interface to be used by gateways of other MVPDs would be just as unsatisfactory as it has been to put CableLabs in charge of certifying devices to compete with those of its cable industry owners" -- well said. And in case you were wondering, yes, "the FCC has the authority, indeed the obligation, to adopt the necessary regulations."

Specific recommendations by the CEA include that DLNA rocks as a standard, the gateway should have at least two tuners, include EPG data and there should be some optional features like transcoding, cache storage and a remote user interface. But if consumers want an ATSC tuner, they should buy a client with one.

TWC: Supports the goals and interest in expanding customer choice, but the rules are unnecessary and the FCC should let the market to continue to innovate -- like that has worked out so far. Finally the FCC should avoid mandating that providers "disaggregate their services;" which the FCC lacks the authority on, and besides, "the timeline is unrealistic."

DirecTV: We acknowledge the importance to consumers, but don't want it mandated. DirecTV tries to tell us how highly sophisticated its set-tops already are, then claims it is already in the process of implementing a similar architecture with RVU (and was promised by early 2010) which is evidence that a mandate is not required. And then it starts to attack the idea by saying the proposal underestimates the complexity of the situation and that it might put providers in legal jeopardy. But maybe our favorite little piece is that it believes the plan is disadvantages to satellite it reduces providers to dumb pipes which is to cables advantage since it has greater capacity and can offer triple-play. Then DirecTV claims it it could make it harder for providers to roll out new features and it would degrade customer service since the customer could be using unfamiliar hardware -- it is hard to imagine worse customer service from DirecTV.

Conclusion
All in all the comments are right on par with what you'd expect and while the FCC has sided with content providers in the past, it seems that it has no choice but go the other way this time around, or else Congress will have to go back and rewrite the rules entirely. There is a lot to get done if the FCC really intends to get these gateways in our homes by 2012, and while we want nothing more than innovation in the set-top box space, the current situation is so bleak we have a hard time imagining this dream coming true.