NCTA Wants to Talk Set-Tops with FCC

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National Cable & Telecommunications Association president Robert Sachs has asked for a face-to-face meeting between Federal Communications Commission chairman Michael Powell and some "technical and business leaders" before the FCC decides whether to hold to a July 2006 deadline for making cable operators deploy set-tops with separate security modules and channel-surfing functions.

Separating out the security functions so they would work with boxes other than those leased by the cable operators was intended to spur the growth of the retail market in set-top boxes with new interactive features, but NCTA said in a letter to Powell Monday that the move is unnecessary. NCTA argues that "cable has fulfilled its commitment to support the retail availability of navigation devices"--the so-called CableCARDS--through its 2002 plug-and-play agreement."

The consumer electronics industry has argued for maintaining the rule, pointing to what it says is cable's vested interest in weakening the retail market competition for the boxes it leases to customers.

NCTA told the FCC last month that the ban isn’t needed to foster a market for retail boxes and will hurt consumers through higher prices for the new boxes.

Since being introduced over the past few months, the number of boxes manufactured for retail has grown to over 140 devices from 11 manufacturers, NCTA told the FCC in December. The number of such boxes deployed has grown from zero to approximately 10,000 “with the number rapidly escalating every week," it said.

NCTA also challenged the consumer electronics makers’ assertion that cable has an interest in weakening the retail market. NCTA sent a copy to Gary Shapiro, head of the Consumer Electronics Association, asking that he join the discussion. That appears unlikely.

Shapiro had not received the letter at press time, but Jeff Jospeh, VP, Communications, for CEA, said it sounded like "just another delaying tactic," noting the timing of the letter just as CEA folks were all headed out to Vegas for their big show. "The time now is for the FCC to act, not for more discussion." he said.
The FCC previously pledged to rule by Jan. 1 on NCTA’s request to scrap or delay the rule. But agency staffers say the decision actually will be made in the next week or two.

Since the meeting could not be convened until mid-January, particularly given that Shapiro and many tech types will be at the CES show in Las Vegas the early part of the month, such a meeting would delay the FCC decision until at least the end of the month.

The FCC has already extended the separation deadline once. In 2003, the commission agreed to delay an original Jan. 1, 2005, deadline for the phase-in by eighteen months in order to give the cable and consumer electronics industries more time to negotiate necessary technical standards. At the time of the extension, the FCC held out possibility for additional postponements.

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