Death Row For the Integrated Set-Top

Here’s a vivid depiction of how radical a change the FCC’s AllVid proposal would be to the way cable, satellite and telco TV operators currently deliver video services (see FCC’s ‘AllVid’ Gateway Would Require Six IP Video Streams and AT&T U-verse TV Would Not Meet FCC’s AllVid Gateway Requirement).

On page 19 of the commission’s notice of inquiry describing AllVid is a diagram showing how the FCC-mandated “set-back” adapters and gateways would look hooked up in a consumer’s home.

The diagrams show that the adapter/gateway would sit apart from an “AllVid-compatible DVR” — leased from an operator or purchased at retail — or and “AllVid-compatible television” (see below). The current CableCard rule (pointlessly) requires MSOs to provide removable CableCards in their leased set-tops — but now the FCC wants to split out the customer-premises equipment functions into physically separate devices.

Remember, MVPDs would be required to provide an AllVid adapter/gateway to every new subscriber.

Which means in order to provide exactly the same digital TV service it does today, an operator would need to provide at least two separate pieces of equipment.

In the “set-back” model, that’s one AllVid adapter — plus one DVR or set-top-like box to provide the navigation functions — per television in the home. In the gateway model, that’s potentially just one residential gateway plus AllVid-compatible receivers for each TV (and there is of course no guarantee any subscriber will have purchased an AllVid-compatible TV or DVR).

Is there any chance this would not be more costly for consumers to receive the same level of service they get today with fully integrated set-top boxes?

It’s possible. IMS Research’s Stephen Froehlich, for one, thinks such an FCC rule could “significantly decrease” the overall cost of customer-premises equipment for pay-TV operators by forcing them to migrate to standardized IP-based gateway architectures (see FCC AllVid Rule Would ‘Ban The Set-Top As We Know It’: Analyst). Of course, if it were possible for MSOs to cut capex significantly using a residential gateway model, you would have to believe they could do it more easily and cheaply without an FCC-mandated solution.

What do you think? Add your comments below.