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After 14 years, FCC Tries Again To Bring Competition to Cable Access

in FCC/Intellectual Property/Media by

SAN FRANCISCO, October 14, 2010 — As expected, the Federal Communications Commission on Thursday ordered cable companies to make their programming more accessible to device manufacturers so that consumers have more reasons to buy innovative gadgets that can more seamlessly access both cable television programming and content on the web.

The order means that consumers should be able to self-install cable cards, and high-definition set-top boxes won’t need the cards at all.

The order comes after a regime implemented by the FCC in 1998 called CableCARD failed to take off. It was supposed to allow third party consumer electronics manufacturers to access the programming more seamlessly by providing consumers with the ability to insert the card into devices to access the programming.

So far, only one percent of cable subscribers use CableCARDs, according to statistics cited by the Obama Administration in its National Broadband Plan, which the administration published this March. And only two device manufacturers, TiVo and Moxi, sell the CableCARD-enabled set-top boxes through retail outlets.

Innovators such as Apple, Boxee, Google, Roku, Sezmi, SonyPlayStation 3, XBox 360 and others have tried to cobble together alternative devices, but “their devices often cannot access traditional TV content that consumers value,” and “without the ability to seamlessly integrate internet video with traditional TV viewing, internet video devices like Apple TV and Roku have struggled to gain a foothold in U.S. homes,” noted the authors of the plan.

The order is the FCC’s latest attempt to fulfill the requirement in the 1996 Telecommunications Act, which seeks to bring competition to a new market in consumer electronic devices that can access cable television services.

As such, it’s an interim measure until it considers new rules that would enable consumers to buy smart video devices that would enable them to change cable companies without having to buy a new device.

The deadline for that proceeding, as suggested in the National Broadband Plan, is the end of the year.

Consumer electronics manufacturers, a digital rights group, and the cable industry itself approved of the way the commission approached the issue in its order.

“We agree with the Commission that implementing these changes – including increasing options for self-installation, providing more transparency and properly equipping technicians – will assist customers who use retail devices that rely on CableCARDs,” said Kyle McSlarrow, the National Cable & Telecommunications Association’s president and CEO.

“It has been 14 years since Congress responded to consumer frustration and required cable to allow cable boxes to be sold competitively,” said Gary Shapiro, president and CEO of the Consumer Electronics Association. “We have felt like Lucy holding the football with every cable industry failure to support competition in the set-top box marketplace.”

“Now, consumers will be able to install their own CableCards provided that manufacturers include instructions and, importantly, the Commission will limit the ability of cable systems to subsidize their own boxes with service costs, which puts competitive devices at a disadvantage,” said Harold Feld, Public Knowledge’s legal director.

Photo courtesy of: Angel Raul Ravelo Rodriguez

FCC Workshop on Media Ownership: Picture Still Fuzzy

in Copyright/FCC/FCC Workshops/Intellectual Property by

STANFORD, Calif., May 25, 2010 — The digital television transition and the emergence of broadband networks have opened up intriguing new kinds of distribution channels for programming, but at a media ownership workshop held in Stanford late last week it was unclear how any of this affects the quality of local programming.

Eddy W. Hartenstein, publisher and CEO of the Los Angeles Times, several executives from media start-ups like set-top box maker Sezmi, internet radio programmer Pandora Media, low-power television station KAXT-CA and multi-platform rights management company FreeWheel Media, as well as several different independent analysts, participated in a Federal Communications Commission workshop on Friday that explored the question of how new media is affecting traditional forms of media.

In addition to trying to reach audiences through social media, broadcasters are also making new uses of the digital spectrum to provide new kinds of programming, and new ways to receive new forms of packaging of programming.

Sezmi, for example, enables consumers to receive free-over-the-air broadcasts along with a few select cable channels and internet video-programming all integrated through its set-top box.  The service is currently being rolled out in Los Angeles, where consumers can buy the boxes at Best Buy.

The only consistent themes running through discussion at the workshop: New distribution channels are fragmenting the audience, and a migration of audience habits to on-demand programming and to the internet is making it hard to pay for quality programming. The executives from the broadcast industry did agree on one thing: That the commission shouldn’t even think about taking any of their spectrum away from them.

Other than that, the invited private-sector participants of the morning and afternoon panels disagreed about most things, with LA Times Publisher and CEO Eddy W. Hartenstein once again calling for a relaxation of local media cross-ownership rules, and others, such as Ravi Kapur, a local broadcast television reporter and vice-president of KAXT-CA, sharing stories of how his local low-power television station is struggling to survive and serve the many diverse ethnic populations of Vietnamese, Filipino and South Asian people in the Bay Area.

One of the most heated discussions occurred between Brian Greif, Young Broadcasting’s vice president of news and general manager of KRON-TV, and Jim Joyce, president of the National Association of Broadcast Employees, who differed on the benefits of sharing news teams’ coverage of local day-to-day events.

Greif said that engaging in the practice frees up other members of the news team to conduct more in depth investigative stories, while Joyce said it was a mere move to cut costs.

To emphasize the tough business environment, Greif noted that total spending on advertising in the local San Francisco television market has plunged by almost a third since 2004 to a projected $438 million in 2010.

James Hamilton, a Duke University professor, citing his own research and Pew statistics, said that “there’s a market failure in terms of local news coverage.”

The FCC staff, which included Media Bureau Chief William Lake, Associate Bureau Chief William Freedman, and advisors to FCC Chairman Julius Genachowski and Commissioner Robert McDowell, asked questions that focused on competition.

Rosemary Harold, McDowell’s media advisor, a former journalist, asked how influential local publications are, and whether they are still seen as the local agenda-setters. Sherrese Smith, Genachowski’s legal advisor, wondered how local news stations could generate original news reporting if they share all their resources. Lake asked whether internet video and free digital over-the-air broadcasts could eventually replace pay television services.

Scot Gensler, CurrentTV’s senior vice president of corporate and business development, said he thought that because of the costs associated with producing programming, most high-quality programming would remain behind pay walls of some sort.

The commission is undertaking its quadrennial review of its media ownership rules, with no deadline for its review. The 1996 Telecommunications Act requires the commission to re-examine every four years  whether it needs to repeal its media ownership rules if they are found to be no longer in the public interest.

The rule changes have been the subject of extensive litigation. The Court of Appeals for the Third Circuit this March removed a stay on the FCC’s cross-ownership rules that prohibit a media company from owning a broadcast station and a newspaper in the same market, but the legal proceedings regarding the rules are still underway.

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