NCTA to CEA: Let's Keep Talking

The NCTA has responded to the CEA’s so-called "consensus proposal" to the FCC on the contentious issue of plug-and-play. National Cable & Telecommunications Association general counsel Neal Goldberg reaffirmed the cable industry’s minimal regulatory stance and said the Consumer Electronics Association proposal opens the door "to the government to micromanage and potentially harm the evolution of a thriving retail environment."

CEA president and CEO Gary Shapiro noted in a press release yesterday that his association’s FCC filing aimed "to end the stalemate [with the cable industry] over bringing full-line ‘plug-and-play’ competition to the market for digital consumer devices that work on cable systems."

Shapiro commented in the release: "Today we are offering a solution that would give consumers the widest choices in both equipment and services. We hope this will be a breakthrough toward a win-win plug-and-play environment that meets all consumer needs."

The CEA proposed in its FCC filing that consumer electronics and information technology manufacturers should be permitted to "build products equivalent to those so called ‘lower-end,’ [cable] operator-supplied interactive set-top boxes; and, equally important, offering a way forward toward licensing, and assuring support for competitive devices that are fully interactive with all cable operator services."

Its filing included "a list of technical, licensing and regulatory objectives to resolve outstanding plug-and-play issues that have been under negotiation since early 2003," along with "a technical proposal to facilitate enhancements to a new generation of CableCARDS."

NCTA counsel Goldberg responded, "To the extent that CE companies—for the first time—have developed a consensus proposal for bringing two-way devices to the marketplace, this new proposal should be discussed at the continuing inter-industry discussions that have been underway since 2003.  Cable will continue to support a minimal regulatory approach that leverages existing marketplace solutions rather than looking to the government to micromanage and potentially harm the evolution of a thriving retail environment."

Goldberg also questioned the CEA’s technical proposal, pointing out that "CableLabs has published technical specifications and related agreements that facilitate the development and deployment of two-way digital cable ready TV sets by CE manufacturers. A number of CE manufacturers have signed these agreements with CableLabs, and at least one, Samsung, demonstrated a working two-way digital cable ready TV set at the 2006 Consumer Electronics Show."

He added that the FCC has not yet publicly addressed the NCTA’s earlier proposal for technical specs. "To expedite delivery of more two-way devices to the marketplace, NCTA submitted to the FCC 11 months ago a deregulatory proposal that would establish straightforward technical specifications for use by any manufacturer wanting to build these devices.  However, the FCC has yet to submit cable’s proposal for public comment."

Goldberg concluded in his prepared statement today: "The cable industry has encouraged CE companies to manufacture digital TVs and other devices so that consumers can access cable’s advanced services without a set-top box. The more ‘cable ready’ products available to consumers, the more consumers will choose cable over our video competitors."

The contentious plug-and-play agreement between the NCTA and the CEA was announced in December 2002. The NCTA has been vocal, particularly regarding the issues of cable ready equipment and the FCC’s set-top integration ban, commenting on its website:

"In a misguided attempt to foster the proliferation of smart card-like devices called ‘CableCARDs,’ the FCC has ruled that cable companies be prevented from continuing to provide their own set-top boxes with integrated security features. The set-top ‘integration ban’ requires cable companies to re-engineer the set-top boxes that they lease to customers to access digital cable services. This will likely cost cable consumers more than $600 million dollars per year in higher prices without benefit, since they will pay $2 to $3 more per month for new equipment that provides exactly the same functionality as their existing set-top box. Under existing rules, CableCARD-dependent equipment is already used by more than 200,000 current cable customers and that number continues to grow."

Last week, 11 top programming executives including MTV Networks chair Judy McGrath, backed NCTA president and CEO Kyle McSlarrow’s opposition to the FCC’s set-top integration ban. Former NCTA president and CEO Decker Anstrom commented to CableWorld last month: "There’s this plug-and-play problem with the consumer electronics industry, which could lead to some pretty silly consequences and cost the cable industry millions of dollars. That’s a form of unnecessary regulation, but would it cripple the industry? No."