Shifting Sands Some very significant shifts in policy thinking are starting to take place in and around the cable industry. They coincide with internal shifts we are seeing in our own perception of the business. Taken together, I think we are at the beginning of some major changes over the next five years in the way people think of the telecommunications business, and cable in particular. The first significant shift is the decision by the Supreme Court a few weeks ago in the case of KSR v Teleflex. I’m not going into the details here, just the result: patents are not going to be as much of an obstacle to the development of new services as they have been in the past. It has been no secret that some companies have developed business plans around accumulating patents in a given area and then making their money by suing anyone and everyone who they can argue even tangentially used their "patented" method or idea without paying fees. We have all watched this take place in the video distribution business, especially with program guides and "one button recording." In both cases, I would have argued that it is pretty obvious, for instance, that an electronic guide—like it’s newspaper cousins—would be shown in a grid. But there’s a patent on the electronic grid! Similarly, it seems obvious to me that if you want your DVR or VCR to record something you would want to do it pushing just one button rather than a series of them. That idea, too, has a patent surrounding it. Until now, the threat of a suit was enough to force some folks to simply not get into the market or to pay the fee. Now the Supreme Court has said that maybe some of these patents should not have been granted—that if something is the obvious next step in the development of technology, it should not be "locked up" by the first person who designs it. This is a significant change, and one we can all hope will free up the creative juices of lots of folks. The sand has shifted. In another area, that of the broad issue of how telecommunications should be regulated in this country, a speech by the NCTA’s Kyle McSlarrow on Tuesday suggested the sands are starting to shift there, too. Until now, the cable industry has been very reluctant to suggest that legislation is the answer to just about anything. The "Christmas Tree" effect is just too dangerous. But Kyle took a big step by suggesting that we not simply look at legislation to "fix" a given regulatory problem but rather take a systemic look at the entire regulatory regime for telecommunications… the whole field, not just cable. The idea is to fundamentally change it from a pre-emptive regulatory approach, the way it is now, to one of much less regulation but careful oversight and enforcement. The idea is to assure that the marketplace is working properly without undue influence or power of any one player. He used the Federal Trade Commission as the model. Now obviously an idea that big is going to take time, effort and a lot of careful thinking to work out. But he’s on the right course. The hourglass has been turned over, and the grains of sand are starting to shift, as with the Supreme Court decision. The result is likely to be some new ways of thinking about the problems we now face as they relate to a regulatory regime that simply cannot keep up with the speed of modern technology and the marketplace.

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