The Consumer Electronics Association (CEA) and cable operators (in the guise of the National Cable and Telecommunications Association) have reached agreement on "plug-and-play" for digital TV sets, a move that will allow consumers, sometime in 2004, to buy DTV sets that will not require a cable set-top box to receive HDTV content via cable.
"This agreement wears down totally what was probably the largest obstacle or bump to HDTV," says CEA President and CEO Gary Shapiro.
Fourteen consumer-electronics companies and seven major cable operators representing more than 75% of all cable subscribers, signed the memo of understanding, which includes voluntary commitments as well as technical proposals for rules to be adopted by the FCC.
"In terms of interfacing consumer-electronics devices and the cable systems, our country has had no common foundation," says Mitsubishi Digital Electronics Vice President, Marketing, Bob Perry. "Until this agreement, it was as if each electric company had a different voltage, a different plug and a different frequency of power. So you could make a toaster that would work in Detroit but perhaps not in St. Louis."
But that situation at least appears close to being resolved (pending FCC approval); the cable industry has agreed to technical specs that will be standardized for what is believed to be 90% of households.
The proposals go beyond simple viewing of content and also include the tricky issues surrounding recording devices and copy protection. Under terms of the agreement, cable operators will use IEEE 1394, or FireWire, connections on HD set-top boxes to allow consumers to record content and also to protect current digital-set owners from obsolescence. Consumer-electronics manufacturers, in turn, have agreed to support FCC labeling regulations that specify Digital Visual Interface (DVI)/High-bandwidth Digital Content Protection (HDCP) or High-Definition Multimedia Interface (HDMI)/HDCP when available, which will make content owners comfortable.
"This gives us a way to move into the future with content protected according to rules we're sending to the FCC," says Comcast Vice President, Strategic Planning, Mark Coblitz.
Jack Valenti, president and CEO of the Motion Picture Association of America, said in a statement that the MPAA had not yet reviewed the agreement but that it is pleased that the CE industry is calling for the FCC to adopt encoding rules.
"We question the wisdom of mandatory encoding rules, but we're pleased that the CE industry agrees that the FCC has jurisdiction in that area," he said. He added that a broadcast flag will certainly fall under that jurisdiction.
Interestingly, the bevy of new services being offered in the cable digital tier—VOD, PVR, interactive services—could require the use of a set-top box anyway. And, if consumers want to record, again, a set-top box will be required. So, in the end, plug-and-play may be useful to some but not to the majority of cable subscribers.
Perry says the need for the agreement became apparent when the FCC mandated that consumer sets include over-the-air tuners by July 2004. The consumer-electronics industry is shooting for that date with respect to products that have plug-and-play capability. He says selling consumers sets with an over-the-air tuner without spending the additional small cost of making them capable of cable reception would be a mistake.
DBS Left out
Now it's up to the FCC to move quickly on the proposals so that the July 2004 date can be reached with actual consumer-electronics products in the market. How quickly that process unfolds remains to be seen. Eddy W. Hartenstein, chairman of DBS provider DirecTV, has already sent a letter to Powell voicing concerns.
"Unfortunately DirecTV and other non-cable operators were not included in the discussions leading to the recommendations, despite some language in those recommendations suggesting otherwise," he said. "As a consequence, DirecTV is unable to join in the recommendations ... some of these [recommendations] raise important issues concerning the proper balance of public and private rights."