FCC could bypass CableCARD on the way to spurring broadband adoption

Is there something about set-top boxes that make consumers not want to subscribe to cable? In a sparsely covered request for public comments two weeks ago, the US Federal Communications Commission asked the general public for comments on several questions related to whether there's something wrong with the design or functionality of the set-top boxes to which customers subscribe, that make them reluctant to embrace cable and satellite TV.

Embracing cable and/or satellite, the FCC sees, is critical to embracing broadband, as the FCC's request indicated. But taking the matter one big step further, FCC Media Chief William Lake -- in a remark first noticed by Reuters' John Poirier -- suggested that regulation on the content of set-top boxes (STBs) themselves may be necessary in order to drive broadband adoption.

"Improved boxes could be an important driver of broadband adoption and utilization," Lake is quoted as saying.

This afternoon, the FCC released a report (PDF available here) on possible options for driving broadband adoption in America. One of those options is a rethink of the Commission's entire stance on CableCARD -- the PCMCIA technology enabling PCs to record digital video, which the FCC was either mandating or planning to mandate, depending on one's point of view.

The problem with CableCARD today, the FCC believes, is that both its architecture and its licensing prevent it from being competitive with other digital video services that bypass cable and satellite altogether, and that are easier to use -- services that often involve the Internet. In its request for comment on December 3, the FCC acknowledged the deficiencies of tru2way, the software platform that was supposed to make developing and deploying applications for digital video hardware platforms easier, effectively renewing former FCC Chairman Kevin Martin's objections as to its efficacy.

"The Commission's CableCARD rules have resulted in limited success in developing a retail market for navigation devices," reads the December 3 request. "Certification for plug-and-play devices is costly and complex. The tru2way license requires device manufacturers to separate cable navigation from all other functions that the device performs. On the other hand, devices like TiVo, Moxi, Microsoft's Xbox 360, AppleTV, Roku, Sony's PlayStation 3, and Vudu each use a consistent menu as they navigate through video content regardless of its source. Certain elements of MVPD technology move at a faster pace than technology on the consumer device side (e.g., the adoption of switched digital video), and vice versa (e.g., the adoption of advanced video codecs in consumer devices)."

In a response to that request the following day, directed specifically to the FCC's Lake, NCTA President and CEO Kyle McSlarrow argued that the cable industry he represents is doing its best to support innovation of the cable delivery platform. The reason it wasn't being embraced by the public, McSlarrow believes, is that the public just doesn't want it.

"The cable industry has invested tremendous time and resources over the past decade to support the development of a retail marketplace. That includes a longstanding industry commitment to develop, deploy, and support CableCARD separate security solutions -- from nationwide support for CableCARDs, to the national deployment of mutually-agreeable interactive Java-based solutions, to the deployment of interactive retail digital television sets based on that platform," McSlarrow wrote. "Notwithstanding these efforts and the substantial progress to date, it is worth exploring why the hoped-for retail market has not developed. It may be that consumers simply prefer the option of leasing devices that are available at government regulated 'cost-plus' rates (or whose rates are otherwise kept low in markets where effective competition exists) and which can be upgraded when the next model is released rather than purchasing a device at retail and assuming the risk of obsolescence. Leasing also makes it easier for customers to switch from cable to satellite to telco video services and back again, especially since today's retail CableCARD devices are not supported by the DBS providers or many telephone-company MVPDs [multi-channel video programming distributors]. It may be that the CableCARD, while well supported, is becoming outdated: AT&T's U-verse and other IPTV services use DRM-based security methods."

Rather than just tweak its handling of CableCARD and tru2way, however, today's FCC report reveals it is considering the "nuclear option" for the whole technology: a possible requirement that MVPDs offer something else, which may or may not (probably the latter) have anything to do with CableCARD.
Specifically, the report says, the FCC is considering "requiring video services providers to supply a small, low-cost, network-interface device whose only function is to bridge proprietary network elements with retail navigation devices."

A presentation delivered to accompany the FCC Media group's formal report on the subject, delivered today (PDF available here), offers more details. It suggests that the FCC "fix CableCARD" by addressing the barriers to its implementation, which the group perceives as "bundled provisioning, pricing, and billing."

A slide from an FCC presentation from December 16, 2009, which clearly suggests one aspect of the National Broadband Plan would be to 'Transform CableCARD.'

The bridge device being proposed by Lake (who incidentally oversaw the distribution of converter boxes for the DTV transition, on behalf of the FCC) is described as "a small, low-cost device whose only functionality is to bridge the proprietary MVPD network elements (conditional access, tuning, and reception functions) to [a] common, open standard widely-used in home communications interfaces; enables a retail navigation device to operate on all MVPD platforms."

The intent of all this: Drive broadband into more homes. Elsewhere in the presentation, there's this: "Delivering Internet video to the television could drive higher broadband adoption and utilization (as 99% of households have TVs, versus 79% with computers) as new apps and uses would emerge."

It therefore may not be any coincidence whatsoever that Broadcom chose this week to premiere its so-called "Persona" platform -- essentially, a system-on-a-chip (SoC) for STBs to enable new classes of multimedia applications, including direct Web browsing, bypassing the PC altogether. Conceivably, a future STB endowed with Persona might not need the bridge device to which the FCC refers, especially if it provides the consumer with the one-stop navigation center the FCC's looking for anyway.

The Commission notes that only 63 days remain until the National Broadband Plan is due to be delivered to Congress.