Cable-ready digital TV sets should be on the market by fall 2004, set makers predicted last week following the FCC's approval of industry-brokered standards for "plug-and-play" TVs. The sets are compatible with cable TV and don't need a set-top converter.
Plug-and-play sets are believed critical to speeding the transition to DTV because it will make the service accessible to the 70 million TV households that rely on cable. The service will be even more attractive to those subscribers, about half, who don't want set-top boxes.
"Many consumers have been reluctant to invest in the newest televisions because of uncertainties about compatibility with cable systems and set-top boxes," FCC Chairman Michael Powell said.
The next stage in the development of cable-ready DTV sets will be standards for "two-way" sets that won't need set-top boxes for video-on-demand and electronic games.
Within weeks, the FCC Media Bureau is expected to propose broadcast-flag rules that would protect digital broadcast from unauthorized Internet transmission.
For cable operators, the introduction of cable-ready digital TV sets will give them a product that can be combined with programming packages to compete in retail stores with satellite-TV service.
"There are an increasing number of agreements between MSOs and retailers," said Robert Sachs, president of the National Cable & Telecommunications Association, "and I expect to see more in the future."
The FCC action approves standards that were negotiated in December 2002 after years of discussion between Cable Television Laboratories Inc.—the cable industry's research arm—and the Consumer Electronics Association (CEA). Included is a copy-protection regimen requiring digital TV sets to comply with encoding that all pay-TV services, including satellite, must transmit to govern what programming may be copied and how often.
According to the scheme, pay-per-view and video-on-demand may not be copied; basic and extended-basic service as well as subscription video-on-demand can be copied once; and broadcast TV can be copied with no limits.
Starz Encore Chairman John Sie praised the FCC for rejecting a portion of the CEA/NCTA agreement that would have placed SVOD under a "copy never" order. That classification, he said, would have violated copyright law's designation of all subscription services as "copy once."
The Motion Picture Association of America fought for the toughest possible copy restrictions, which these aren't, but was not prepared to comment at press time.
In a victory for equipment manufacturers seeking to protect home-recording rights, cable and satellite operators will be prohibited from reducing the resolution of broadcast programming or of remotely blocking the copying of digital programming via VCRs and other analog devices.
To make high-definition programming available to cable customers who have already purchased digital TV sets, by April 1, cable operators must supply HDTV set-top boxes with connectors necessary for linking to copy devices for any subscribers who request them.
The Satellite Broadcasting & Communications Association, which was not part of the negotiations, criticized the provisions that bind DBS providers to restrictions they had no part in negotiating, particularly the copy-protection regimen and the bans on down-resolution and selectable output controls.