Cable “has had years to prepare” for the integration ban on set-top devices, and “there is simply no tangible case for any further delay” beyond the July 2006 deadline, CEA told the FCC in an ex parte filing (MB 97-80) responding to the NCTA’s latest call for extending or scrapping the ban (CED Dec 22 p6). “NCTA’s assertions that the costs associated with the separate security requirement will remain high are patently wrong,” CEA said. Moreover, cable’s arguments that licensing, warranty and indemnification costs are borne only by the cable industry are “grossly misleading,” and its claim that pricing of leased set-top boxes is set by govt. mandate is a “total fallacy,” it said. “Cable companies can and do charge whatever prices they choose. The notion that cable MSOs will suddenly have to switch out their entire fleets of set-top boxes, even though the regulation explicitly gives them the right to keep existing devices in service, also is unsubstantiated,” CEA said. “Innovation and consumer choice hang in the balance” with the July 2006 deadline, the association said. “Only full- scale production to service MSO devices will achieve the combination of priority, investment, and volume necessary to lower acquisition costs, achieve reliability and generate confidence for competitive entrants and consumers. NCTA’s misguided belief that prices will remain high even after full- scale production defies the laws of economics, the marketplace and common sense.” With the Commission likely soon to rule in the debate on keeping the integration ban, TiVo CEO Mike Ramsay was among those supporting the CEA in urging that the FCC “hold fast” to the July 2006 deadline. In a Dec. 22 letter to Chmn. Powell, Ramsay said what’s at stake is availability to consumers of alternatives to cable- supplied set-top boxes. Without the ban, innovations TiVo has developed “will not be available to cable subscribers because TiVo will not be able to sell a digital cable box that is either the functional or competitive equivalent of cable- leased boxes,” Ramsay said. In particular, he said, TiVo must be allowed to offer a dual-tuner set-top box in competition with dual-tuner boxes leased by the MSOs. “Most consumers will not purchase a TiVo box no matter how much better our user interface or how many additional features we can offer if the device must be purchased rather than leased and still is missing the minimum base functionality that consumers value most in a digital video recorder,” Ramsay told Powell. “Simply put, if cable is not required to use the same CableCARD technology that is required of scores of information technology companies, cable will leverage its dominant position in video distribution into the market for video- related consumer electronics and will control the market for the indefinite future.”
Nothing in the recent CE filings at the FCC “strengthens the case” for keeping the July 2006 integration ban on cable set-tops, NCTA told the FCC Mon. in an elaborate 9-page filing. With the possibility the Commission will address the issue at its Jan. 13 agenda meeting, NCTA disputed CE’s arguments point by point. Keeping the ban “goes well beyond the level of government intrusion in the marketplace that is necessary to ensure the commercial availability of navigation devices, especially now with the cable industry’s demonstrated support for CableCARD-enabled devices,” NCTA said. Over 140 unidirectional CableCARD-ready products are available from 11 CE manufacturers, and the number of CableCARDs deployed in the field has grown from zero to 10,000, “with the number rapidly escalating every week,” NCTA said. As with any new technology, “all parties expected some start- up problems” with CableCARDs, it said. On the CE side, problems have included firmware needing updates in the home, “odd arrangements of inputs,” and soldering irregularities making card insertion difficult. On the CableCARD side, “there also has been the occasional need for a firmware download,” or the occasional error by a customer service representative, NCTA said. But contrary to CE industry statements about the malfunctions’ seriousness, NCTA said “these are problems that are normal and are routinely corrected as they arise.” NCTA also disagreed with CE’s argument that keeping the integration ban will aid negotiations on a bi-directional plug-&-play solution. “It does not follow” that leaving the ban in place would create a new level of certainty in the talks or that they would gain impetus,” as CE has argued, NCTA said. “The simple fact is that those involved couldn’t possibly be working any harder than we already are to try to bring the discussion to a successful conclusion.”
Texas Instruments is “reviewing the allegations” raised in a complaint filed at the International Trade Commission (ITC) by Biax Corp. that TI chips used in Kenwood HD Radio receivers violate 5 Biax patents (CED Dec 15 p3), a TI spokeswoman said. “While we're not discussing details, we can tell you that TI has a long history of respecting intellectual property, and we will stand behind our products and customers,” the spokeswoman said. “We will fully cooperate with the ITC to seek a prompt resolution, and we expect that this issue will be resolved without impacting our business.”
The CE retail environment has grown more promotional in recent weeks, but it’s “more reactionary than a systemic change,” Ron Boire, Best Buy exec. vp-gen. mdse. mgr., told analysts Wed. in the chain’s 3rd-quarter conference call.
IBiquity, Kenwood and Texas Instruments are named in a complaint filed last week at the International Trade Commission (ITC) alleging that TI’s “C6000” family of DSP devices sourced from its plants in Malaysia and Taiwan and built into Kenwood HD Radio receivers produced in Japan violate 5 patents on digital processing techniques held by a licensor in Boulder, Colo.
PVR ownership will grow nearly tenfold, reaching 58 million U.S. homes for 49.5% penetration by the end of the decade, Smith Barney said in a new report that examines the technology’s impact on the media industry. The PVR boom will outpace that of cellphones and DBS, but not DVD, and network TV advertising faces the biggest risk, the report said.
It was at the “request” of HD DVD studios Paramount, Universal and Warner that Thomson agreed to provide HD DVD, as well as Blu-ray, replication services through its Technicolor subsidiary, and market HD DVD players under the RCA and Thomson brands to support the software. So said Thomson’s Germany-based corporate research operation in a letter sent Thurs. to all Blu-ray partners as a heads-up that the company’s plan to market HD DVD players and provide HD DVD replication “does not mean that Thomson will lower its support and commitment” to Blu-ray.
In the fast-developing Blu-ray vs. HD DVD format war’s latest shocker, Thomson, a Blu-ray founder, told Consumer Electronics Daily Thurs. it will come to market in the U.S. 4th quarter 2005 with an RCA-branded HD DVD player but not a Blu-ray product. A Thomson-branded HD DVD deck will be marketed about the same time in Europe or soon thereafter, a spokesman told us.
DivX Networks signaled it may hold a wild card in next year’s Blu-ray vs. HD DVD format war, saying it is developing a commercial model for delivering packaged HD content on red-laser DVD using the DivX codec. DivX executives have discussed plans to commercialize such playback to make HD packaged media accessible to the mass market sooner than alternatives such as Blu-ray and HD DVD (CED Aug 31 p2). They have hailed the DivX codecs as being capable of 720p high-definition at data transfer speeds less than 4 Mbps, while achieving 1080p below 10 Mbps -- all with “very low overhead and very little complexity.” A DivX spokeswoman said her company is “working closely with the Hollywood studios on content deals” for DivX-encoded high-definition DVDs. She added that announcements on any such agreements were likely soon after the Las Vegas CES. DivX will use CES to launch a major initiative with undisclosed CE partners to position DivX technology as “the preferred platform for acquisition and consumption of digital media in the connected home,” the spokeswoman said. The so-called “DivX Connect” platform will let consumers use low-cost CE devices gain access to and manage digital content libraries from their living rooms, she said. At CES, the company also will announce a new version of DivX technology that will let DivX users and content partners more easily transfer content throughout a personal network, the spokeswoman said. Almost all major OEMs are building DivX-certified DVD players, she said. A projected 20 million DivX- capable devices will be on the market by year-end, she said, “all of which can securely play back any DivX VoD title downloaded from the Internet.”
When consumer confidence in the CableCARD interface “hangs in the balance, so does a critical element in the success of the DTV transition,” representatives of CEA and several of its member companies told the FCC in meetings Nov. 30, disclosed an ex parte filing at the Commission. CEA and the companies represented -- including Microsoft, Pioneer, Sharp and Sony -- reaffirmed arguments in CE’s campaign urging the FCC to resist cable industry pressure and keep intact the July 1, 2006, ban on MSO set-top devices with integrated security. Most consumers will receive DTV through cable, and as they choose their next DTV displays, they'll be more willing to pay the premium for a set with an integrated tuner if that set is CableCARD-ready, the CE group said. “Conversely, if consumers believe CableCARDs are unreliable, they may be motivated to buy monitors lacking a digital tuner on the assumption that they will use a cable operator-supplied set-top box and therefore will not need the integrated tuner,” the group said. “This threat to the DTV transition will be eliminated when the cable operator’s set-top boxes also use CableCARDs. Only common reliance on separable security will assure the development of a competitive market for value-added consumer electronics products with integrated DTV tuners.” The Commission’s existing rule “will serve its intended purpose only if it is left undisturbed,” the CE group said; no further action by the Commission is necessary. By contrast, it said, any delay in the July 2006 date “would be tantamount to repeal of this regulation -- with its never having had any chance to serve the Commission’s intended purpose.” But Comcast, meeting with many of the same FCC officials the same day, urged the Commission to delay its integration ban “a minimum of 18 months if it is not persuaded of the need to eliminate the integration ban altogether,” it disclosed in a separate ex parte filing. Reaffirming cable’s arguments for lifting or delaying the integration ban, Comcast told the FCC it believes “the statutory objective of ensuring the competitive availability of navigation devices can be and is being achieved” through the free marketplace. Cable “is fully honoring its commitment to support CableCARDs and to work assiduously on negotiation of a 2-way plug-&-play agreement,” Comcast said. Imposing the July 2006 integration ban “would increase costs to consumers and restrict the choices available to them,” Comcast said. Contrary to CE’s claim that leaving the ban intact was critical to a successful DTV transition, Comcast argued the ban would “impede development of a low-cost digital set-top box” and delay the transition.