NCTA Calls On FCC To Initiate Steps To Develop Robust Digital Set-Top Market

Spurring market could improve broadband adoption

A robust retail market in digital set-tops has not
materialized, the National Cable & Telecommunications Association says, and
it calls on the FCC to initiate a broad notice of inquiry to discover how, and
whether, such a market can be achieved.

That came in a letter to FCC Media Bureau Chief Bill
Lake from NCTA President
Kyle McSlarrow Friday and followed the FCC's announcement of a request for
comment on spurring a market in set-tops that could deliver both cable and
broadband video to TVs as a way of spurring broadband adoption--76% of homes
have computers, over 99% have TVs.

But NCTA wants the FCC to take the next step and open a
notice of inquiry.

"As an initial matter, we agree that a
fully-competitive retail navigation device market has not yet developed -
despite the persistent efforts of the commission, the cable industry, and consumer
electronics manufacturers and retailers," said McSlarrow.

The FCC tried to spur that market with a mandate that the
surfing and security functions be separated, but has recognized that did not do
the trick.

NCTA points out that even if it had developed, it would have
been based on a video landscape that does not reflect today's marketplace. That
is a point cable operators made against the mandate in the first place, saying
a hardware fix--the CableCARD technology--would likely be outstripped by a
downloadable version (then FCC Chairman Kevin Martin said the industry needed a

NCTA noted that the FCC's request for comment talked about a
platform-agnostic approach to a "plug-and-play" solution. It pointed
out that it has long argued for a platform-agnostic approach that would allow
devices to work across satellite and telco platforms, too, which are not under
the same set-top mandate as cable.

He said that undeveloped market came despite the cable
industry's best efforts, pointing out the industry has deployed over 17 million
set-tops with CableCARDS.

While it is contemplating changes, McSlarrow asked the FCC
to continue to consider waivers of the mandate, including for HD boxes--which
the FCC has indicated it is receptive to--and of the requirement that every operator-supplied
box have a CableCARD slot.

NCTA got a shout-out from Public Knowledge for the letter.
"We are pleased that the cable industry has joined us in supporting an FCC
inquiry into the state of the set-top box market.

We agree with NCTA President Kyle McSlarrow," said
Public Knowledge President Gigi Sohn in a statement. "We also agree that the
rules for set-top boxes and related devices should apply to all video