The cable and telco broadband and technology industries, working together, have cut set-top box energy use by 57% since a voluntary energy-efficiency effort was launched almost a decade ago. In 2021 alone, that saved consumers $2.5 billion on their energy bills.

Those findings come from an annual report from independent auditor D+R International, a report was required as part of the voluntary agreement. 

It hasn't hurt that the number of deployed set-top boxes has decreased significantly, down nearly one-third since 2012. The overall decrease in boxes is combined with more energy-efficient set-tops and an increase in purchases of non-DVR internet protocol (IP) boxes that consume far less energy, the report pointed out.

Then there is the cord-cutting that has reduced the number of U.S. TV homes with a set-top from 58% of those homes as recently as 2016 to only 37% in 2021.

In 2012, NCTA–The Internet & Television Association, the Consumer Technology Association and CableLabs signed the Agreement for Ongoing Improvement to the Energy Efficiency of Set-Top Boxes, with other signatories that accounted for 95% of the traditional pay TV market in 2021, according to NCTA.

Among the companies that struck voluntary agreements are Comcast, Charter Communications, Cox Communications and DirecTV and Dish Network.

There will be more reports to come.

Last year, the signatories extended the agreement through 2025, with more rigorous energy-savings targets and the goal of cutting set-top energy use by two-thirds, with 86% of that reduction goal already reached by the end of 2021, the report concluded. ▪️

The Federal Trade Commission has approved a final order of its settlement with broadband and TV semiconductor components supplier Broadcom.

That came after a mandatory public comment period on the proposed settlement.

The vote to approve the finals order was 3-0-1, with chair Lina Khan recusing her self from the vote.

Back in July, the FTC struck a deal with Broadcom to settle allegations Broadcom illegally monopolized the markets by conditioning access to its components on preventing customers from purchasing chips from its competitors.

Under the settlement, Broadcom agreed not to require customers to source their components exclusively or almost exclusively from the company.

Under the settlement, Broadcom cannot enter into certain exclusive agreements for chips for broadcast set-top boxes, as well as digital subscriber line and fiber broadband internet devices. It also prevents Broadcom from retaliating against customers who use its competitors.

The FTC pointed out that Broadcom dominates chips at the core of not only cable set-top boxes, DSL and broadband devices, but it is also a significant supplier of chips for streaming on set-tops, WiFi chips and chips converting analog signals to digital. Broadcom‘s direct customers are equipment manufacturers that supply AT&T, Charter, Comcast, Dish Network, Verizon Communications and others.

Rising prices on memory will continue to have an adverse effect on Arris’s set-top box business this year, though perhaps not quite as much as they did in 2017.

“Increased DRAM prices have clearly affected ARRIS, degrading EBITDA by over $100 million in 2017,” Simon Leopold, analyst at Raymond James, pointed out in a research note based in part on his discussion yesterday with Arris CFO Dave Potts at the firm’s 39th Annual Institutional Investors Conference. “Although the rate of increasing costs has slowed, ARRIS is not anticipating a reversal in 2018.”

He noted that much of the DRAM used by Arris goes into set-tops, which contribute about 45% of sales.

Arris has already started to outline how it will address the memory cost issue and drive more efficiencies into its CPE business, noting last month that it will be “more selective” with set-top deals, with an emphasis on profitability more so than sales growth.

RELATED: Arris to Be ‘More Selective’ With its Set-Top Box Business

Likewise, Arris is “in extensive discussions with customers to adjust pricing to reflect increased memory costs, and are being increasingly more selective on the projects that we pursue,” Bruce McClelland, Arris’s CEO, said on the company’s Q4 call last month.

Though set-tops are a big part of Arris’s business today, the company has been branching out to adjacent areas, like mobile and wireless and enterprise, via its acquisition of the Ruckus Wireless and ICX Switch businesses from Brocade soon after Brocade’s merger with Broadcom.  

Such moves give Arris “exposure to an adjacent market and helping it drive growth and provide diversification,” Leopold noted, adding that the company reiterated a growth expectation of 20% year-on-year in that segment as wireless marks a “natural progression” for Arris.

He added that Arris also expects the mix of sales to cable operators to shift to network investments and transmission products and away from set-tops and other CPE, with an expected benefit going to sales of Arris’s converged cable access platform (CCAP) gear and software and as MSOs start to move to distributed access architectures.

And Potts reiterated Arris’s stance that M&A will continue to be consideration in Arris’s growth strategy, though plans for capital allocation will be balanced to include buybacks, Leopold said.

"Yes, I think M&A will continue to be part of what we do," Potts said, according toLight Reading. "What I worry about in five years from now if we aren't continuing to add, what is it that we will have? Who will we be as a business?"

Arris has struck a deal to sell a manufacturing facility in New Taipei City, Taiwan, that makes consumer premises equipment such as set-tops and cable modems to long-time partner Pegatron Corp.

As a result, Arris said production of CPE will transition to Pegatron’s Suzhou site in China by the end of 2018. Arris said it will continue technology and development and business operations in Taiwan, including ops that came way of its recent acquisition of Ruckus Wireless.

Financial terms were not announced, but Arris reasoned that the sale will help it take advantage of Pegatron’s scale and will enable Arris to further its investments in emerging technologies and speed up its ability to innovate and bring new products to market. The sale also ties into a supply chain strategy at Arris that aims to work with “key partners” and “simplify its manufacturing footprint,” the company said.

An objective of the deal is to help Arris improve its corporate gross margins, which has been pressured by rising DRAM prices that could account for more than 5% of revenue today, up from 3% in 2016,  Simon Leopold, analyst with Raymond James, explained in a research note.

He noted that Arris obtained the Taiwan facility from its $2.35 billion acquisition of Motorola Home in 2013, and that Arris moved some of its production there following its purchase of Pace plc in early 2016, while still using a contract manufacturing model that had been part of Pace’s strategy.  

“With the sale of the Taiwan factory, ARRIS is largely out of the manufacturing of its CPE,” Leopold wrote, adding that Arris still has some production in Brazil.

"ARRIS's global vision is to leverage scale across a key number of global partners that allow us to concentrate on R&D, as well as anticipate the needs and expectations of our customers and their subscribers,” Jim Brennan, SVP, supply chain, quality and operations at Arris, said in a statement. “Pegatron is a long-term, trusted manufacturing partner of ARRIS, with a proven track-record of quality and performance, and we expect the transition to be seamless for our customers.” 

Ericsson isn’t the only company providing an upgrade path for Mediaroom, the IPTV platform it acquired from Microsoft in 2013.

Cisco Systems is applying some competitive pressure on Ericsson as it moves ahead with a replacement program that takes direct aim at Mediaroom’s market. In addition to converting those service providers to Cisco’s own cloud-based, multiscreen offering, the Infinite Video Platform (IVP), Cisco said it can help operators make the move without swapping out their old set-tops.

Cisco embarked on the Mediaroom replacement program after a number of its customers “expressed concerns around where Ericsson was with their media division” and asked if Cisco would be interested in providing an alternative offering, Ramin Farassat, director of product line management and product marketing for Cisco’s Service Provider Platforms & Applications unit, said.

Farassat said those conversations got underway about a year ago. Coincidentally, they were happening around the time a Bloomberg report suggested Ericsson had hired banks to review its media business, including the search for a possible buyer for its broadcast and media services unit.

Ericsson hasn’t confirmed those plans, but last year it renamed its Broadcast and Media Services business unit Red Bee Media, sparking fresh speculation the decision was tied to possible M&A activity involving that division.

UPDATE (1-31-2018): Ericsson Sells Majority Stake in Media Solutions Unit

Enabling the Move to IVP
The premise behind Cisco’s Mediaroom replacement program is to enable those service providers to move to IVP, which supports linear TV, video-on-demand, cloud DVR services (including 4K) and new interfaces and voice navigation for set-tops and mobile devices, in a way “that doesn’t actually reinvent the wheel,” Farassat said. “We didn’t want to introduce another completely new architecture to customers.”

While Cisco’s Mediaroom replacement approach leans on the IVP cloud backend for video management and distribution, it doesn’t require the operator to swap out most of the boxes they are currently using for Mediaroom. Those include boxes originally made by suppliers such as Arris, Technicolor and Cisco. (Cisco sold its consumer premises equipment business to Technicolor in late 2015.)

Cisco’s program calls for those operators to convert those legacy boxes to support IVP, a move that does require a changing out of the box’s operating system, middleware and user interface.

Farassat said Cisco did a survey of boxes now used by Mediaroom to see if they have the processing and memory required to run IVP. It found that most of them — save for a few first-generation models still in the field — are eligible for the conversion/upgrade.

Cisco is also looking to complement those older Mediaroom boxes (to be outfitted with a new Linux-based platform during the conversion) with new, more advanced boxes that run Android TV.

However, both environments — the legacy boxes and the new ones running Android TV — would use the same style of user interface. Those UIs “look identical and have the same performance,” Farassat said.

Making Newer Connections
In addition to operator-supplied boxes and smartphones and tablets, IVP’s converged core also would pave the way for operator partners to run services on TV-connected retail streaming devices.

For the set-top box conversion process, Cisco is setting up a way for operators to target individual boxes or groups of deployed boxes without requiring expensive truck rolls. For example, the consumer would get a message prompting them to reboot the box to receive the new software, then reboot it again for the new interface to be installed.

“Everything is done remotely,” Farassat said.

Service providers that opt for the program will be running Mediaroom and IVP in parallel until the conversion ends. After that, they can shut down the Mediaroom servers, encoders and other elements of the platform.

Cisco has not announced any takers for its program, though Farassat expects that trials will be underway as early as the end of Q1 2018 or by the start of Q2.

Don’t expect Ericsson to merely stand by as Cisco attempts to steamroll its Mediaroom market. Ericsson has had some success in getting Mediaroom partners to upgrade to MediaFirst, its new cloud-based, multiscreen platform.

Earlier this month, Bell Canada and Ericsson expanded a multiyear deal that will pave the way for BCE to upgrade to MediaFirst. Telus, another Mediaroom customer, is also upgrading to MediaFirst to augment Optik TV, its full freight-managed IPTV service. Telus is also using MediaFirst to power Pik TV, an IP-delivered skinny bundle service introduced last April that runs on smartphones, tablets and an Android TV-powered box sold by Telus.

J-Com, Japan’s largest cable operator, and Canada’s SaskTel are other announced MediaFirst customers. AT&T, a longtime Mediaroom user for its U-verse platform, said in 2015 it had tapped Ericsson to “enhance” its telco TV platform and evolve its satellite and wireline TV offerings in the wake of the AT&T-DirecTV merger. That announcement did not mention MediaFirst, but last year FCC documents revealed AT&T was working on an Android TV-powered device.

Though Cisco is using IVP to target the Mediaroom base, the vendor has already notched several deployments of it with service providers outside the Mediaroom universe that include Vodafone (for its GigaTV service in Germany), Canada’s Eastlink and Israel’s YES, among others.

MCTV said it has integrated Netflix on its Fusion multi-room HD-DVR platform, which is based on Arris-made boxes that run Espial’s Elevate system.

Like similar Netflix integrations, MCTV doesn’t handle billing of the OTT service but requires that customers have an active Netflix account and take the operator’s high-speed internet service.

MCTV’s Fusion offering teams Arris media gateways and set-tops (including the MG5225 and the MP2000, MP2050, MP2150 and IP815) with Espial Elevate, which is derived in part from Espial’s acquisition of Arris’s Whole Home  Solution (and Moxi UI) last year.  

RELATED: Espial Seals Deal For Arris’s Whole Home Solution Platform

Massillon, Ohio-based MCTV serves more than 47,000 homes and business in Stark,  Wayne, Summit, Holes and Tuscarawas counties.

“MCTV continuously offers more options for an enhanced experience to our customers,” Robert Gessner, president of MCTV, said in a statement. “More now than ever, people want more and they want it at their fingertips. Simplifying access to Netflix content is just another example of MCTV’s ongoing commitment to adapt to the needs of our customers by going the extra smile.”

MCTV joins other MVPDs that have integrated Netflix at the set-top, a group that includes Comcast (for its X1 platform), other Espial partners, several of TiVo’s MSO customers, Liberty Global, and, of recent note, Verizon Fios.

RELATED: Verizon Puts Netflix on Some Fios TV Boxes

Earlier this year, MCTV announced it had also teamed with Espial on an IPTV effort for the operator’s cable RF and fiber IP customers, a move that soon followed MCTV’s plans for “Excellerate,” an FTTP initiative that will see a GPON network overlay the company’s existing HFC plant.

RELATED: MCTV Pushes Fiber-to-the-Premises Overlay With ‘Excellerate’ Initiative

Cox Communications has integrated Netflix on compatible “Contour” set-tops that are powered by Comcast’s cloud-based X1 platform.

RELATED: Cox Goes Wide With New ‘Contour’

Cox is expected to announce more detail about the integration later today, but this customer support page, first spotted by Fierce Cable, notes that Cox customers can now access Netflix from their Contour 2 receivers. Like Comcast’s Netflix integration, Cox’s version weaves the OTT service into search results and is supported by Contour’s voice remote.

However, the current version of Contour 2 does not support 4K, so that part of Netflix’s library is not available to Cox subs on the set-top box. It might only be a matter of time. Comcast recently extended support for Netflix’s 4K library on X1 devices,  starting with the XG1v4,  that can render the new pixel-packed video format.

RELATED: Comcast Streams Netflix 4K Fare to X1 Boxes

Update: Cox announced Monday afternoon the integration of Netflix on Cox Contour nationwide at the Internet Association’s Virtuous Circle Summit in San Francisco.

“Cox has supported Netflix subscribers for years with our high-speed internet service and now we’re improving the experience by adding the Netflix service to the Contour TV guide,” Pat Esser, president of Cox, said in a statement. “Customers want to easily access the content they care about – across sources – anytime, anywhere; we’ll continue to look for more ways to improve the video experience.”

Because Netflix is delivered to set-tops OTT via the public internet, that content is subject to Cox’s usage-based internet policy. Cox recently introduced an unlimited data option that complements a policy in which it charges customers $10 for an extra 50 gigabytes when they exceed their monthly data plan.

RELATED: Cox Nears Launch of Unlimited Data Plan

Cox’s integration of Netflix isn’t a surprise, as it has been adding new features already rolled out by Comcast on its X1 platform on a regular cadence.

RELATED: OTT Becomes A-OK on the STB

In an interview earlier this year, Kevin Hart, Cox’s EVP and chief product and technology officer, said that OTT set-top box integration is “on our near-term roadmap.”

Hart also noted that Cox is working on a cloud DVR product. Comcast offers a cloud DVR service for X1 and has also completed an integration of YouTube.

Zodiac Interactive and ActiveVideo are pitching a joint solution that, they claim, can help pay TV of all sizes bring a next-gen interface/experience to any installed set-top box.

They said the joint offering builds on prior customer-specific ActiveVideo-Zodiac collaborations. Notably, Charter Communications’s Spectrum Guide for legacy set-tops as well as newer ones with IP connectivity use both ActiveVideo and Zodiac technologies. ActiveVideo operates as a joint venture of  Charter and Arris.

RELATED: Arris, Charter Close $135M ActiveVideo Acquisition

The joint solution being introduced this week and timed with the IBC show in Amsterdam, combines the cloud virtualization capabilities of ActiveVideo’s CloudTV platform with Zodiac’s PowerUp Stack software and AMS cloud platform.

Cable Bahamas, which delivers service to about 250,000 set-top boxes, is on board to rollout the new joint solution in the second quarter of 2018, and will include a mosaic guide that displays live content from multiple channels, and unify an experience across multiple devices.

“Using the integrated solution, small or large pay-TV operators around the world can deliver the industry’s most advanced services to every subscriber in a matter of months,” Zodiac CEO Brandon Brown said in a statement.

ZoneTV, a “digital-first” video service that’s targeting integrations with MVPD set-tops, said it will be heading to NATPE next week looking to do some major wheeling and dealing.

ZoneTV, now helmed by former AT&T exec Jeff Weber, said it will be going to the show in Miami looking for 10,000 hours of content it can use toward a planned programming expansion and the coming debut of a service that will enable that content, in genres such as sports, food and lifestyles, to be delivered inside MVPD set-tops and interactive program guides alongside a pay TV operator’s regular content.

The company will be looking to broaden a library of licensed content that already includes fare from sources such as Field and Stream, Saveur and Popular Science. ZoneTV’s focus on set-tops seems to share similarities of others that are trying to integrate OTT content into MVPD guides, including Frequency, a company backed by Liberty Media as well as Wurl, which has announced  WideOpenWest,  Fidelity Communications and TDS among its pay TV partners.

RELATED: TiVo, Frequency Connect on OTT

ZoneTV, formerly known as ES3, initially targeted Mediaroom, the IPTV middleware platform that Ericsson acquired from Microsoftin the fall of 2013 that powers pay TV services from companies such as AT&T, Hawaiian Telecom, Telus, Frontier Communications and CenturyLink.

DirecTV, now part of AT&T, was ZoneTV’s first launch partner outside the Mediaroom environment. More recently, Comcast integrated ZoneTV’s “Santa Tracker” app on its X1 platform during the holidays.

RELATED: Comcast’s X1 Takes ‘Santa Tracker’ Over-the-Top

“NATPE calls itself the ‘forum for new ideas,’ and ZoneTV is all about creating TV’s new delivery models,” Weber said, in a statement. “Our whole programming concept is fresh: developing linear programming formats that pay TV providers can add to their line-ups without having to clear or manage bandwidth for the new content.”

Set-top box functionality continues to get virtualized into smart TVs, specialized streaming players and mobile devices, but deployments of the boxes themselves continue on.

Case in point—Colorado-based Evolution Digital, a company that primarily caters to tier 2/3 MVPDs, said it has reached a milestone with 12 million digital set-tops shipped.

Evolution, which is helping its partners transition to IP with a mix of hybrid devices and an IP video platform, comes about eight years after its inception. The product mix includes standard- and high-definition digital transport adapters (DTAs), and the recently rebranded “eBOX” QAM/IP hybrid.

Though Evolution ships boxes to mid-sized providers such as WideOpenWest, Buckeye Broadband, Midco, Blue Ridge Communications and Metrocast, and has a deal with the National Cable Television Cooperative, it also counts larger MSOs, such as Comcast, Cox Communications, Cable & Wireless, and Mediacom Communications, among its customers.

RELATED: WideOpenWest Paves IP Video Path with Evolution’s ‘eVUE-TV’ Platform

“Building upon our success on the hardware side, we are now shifting our focus to deploying integrated software-based solutions like eVUE-TV, our IP video platform for delivering a complete end-to-end IP video solution. As a disruptor in the cable industry, we will continue to deliver cost effective, integrated solutions that meet the needs of the Tier 2 marketplace around the world,” Evolution Digital CEO Chris Egan said, in a statement. 

The FCC is trying to spur separate competition to cable-leased set-tops in the delivery of video programming, but according to one federal court, the two are inseparable.

A panel of the U.S. Court of Appeals for the Second Circuit has upheld a lower court decision dismissing a class action suit against Time Warner Cable (now part of Charter Communications) for allegedly tying premium cable services to leasing cable boxes, finding that for the purposes of antitrust law, at least, cable boxes and the premium cable service they transmit are not separate products so can't be anticompetitively tied.

"A cable box must be cable-provider-specific, like the keys to a padlock," the court found. "Although the plaintiffs frame their claim as a tie-in, the core issue is a cable provider's right to refuse to enable cable boces it doesn not control to unscramble its coded signal."

The decision was handed down Friday.

A group of subs had alleged antitrust violations, but a district court judge dismissed two different iterations of the suit, after which the complainants appealed.

A three-judge panel of the court--Judges Denny Chin and Ralph Winter supporting, Judge Christopher Droney dissenting --concluded that the complaint failed to come up with facts adequate to prove, if established, "that 1) the set-top cable boxes and the premium programming they transmit are separate products for the purposes of antitrust law, and that 2) Time Warner possesses sufficient market power in the relevant markets to establish and illegal tie-in."

The majority judges also point to the FCC rule capping the price of leased set-tops, saying: "We doubt that Time Warner would attempt to monopolize the market for bi-directional cable boxes when an FCC regulation caps the amount of profits that Time Warner may reap from that market."

The court also said the FCC's inability to create a competitive market also argues against the tying claim.

In his dissent, Droney said the complainants had produced evidence that "plausibly alleges a separate product market for consumer-purchased cable boxes, which is suppressed by Time Warner's anticompetitive conduct." He said concluding otherwise "imposes too high a bar on plaintiffs."

Offering further evidence that Comcast is more eager than ever to migrate its entire base to its next-gen X1 platform, the MSO has opted not to push forward with a planned upgrade for the “A31” guide on its legacy Motorola digital set-top box platform.

“Recently a decision was made to not move ahead with the upcoming release that was previously referenced,” Comcast noted on its customer forum. “This was a very difficult decision because there were multiple benefits in the release but the [decision] was based on numerous factors and the desire to focus on the future. We have almost 50% of our deployed set tops running on our X1 platform and we are adding about 40,000 more boxes every day on the X1 platform.”   

Comcast, the post added, plans to implement “a simpler and more surgically deployed guide release for A31 legacy set tops” to address some issues on that guide, but noted that those changes likely won’t come out until early 2017.

“We will certainly continue to support our legacy platform for some time,” the post read, adding that most of the MSO’s energy and resources, with respect to the on-screen guide, is going toward X1.

Benefits and enhancements that were on tap for the upgraded A31 release included come code efficiency improvements, bug fixes, repairing a delayed tuning issue on some boxes, as well as some self-service options that would let customers “self-diagnose and self-heal some minor issues.”

And Comcast tried to assure customers that it’s not abandoning the legacy platform, and will continue to support it and make it an option, even as the operator becomes increasingly fixated on X1.

“We are targeting fixes and enhancements for our older cable boxes, just the pace for that has always been much slower (due to many reasons),” the MSO noted in response to questions posted by customers. “These legacy guide code releases are not a huge priority as we continue to have less and less of these boxes in customer homes and we have an alternative solution in place (at the same monthly price) that is a vastly improved experience. We will continue to have legacy cable boxes available (and support for them) for some time for any customer who chooses that option.”

Though X1, which now supports a popular voice remote, is superior to the legacy interface in almost all respects, some customers on the thread were still disappointed to hear news about the decision not to push the A31 upgrade and some remain reluctant to move to Comcast’s new platform.

As for concerns about past problems about X1, Comcast noted in the post that new, cloud-based platform addresses issues and introduces new features on X1 via weekly releases and updates – “something that took 18 to 20 months to fix or correct on our legacy platform.” 

The White House’s public backing of FCC Chairman Tom Wheeler’s plan to create new rules aimed to open up the retail market for set-top boxes adds to the “overhang” faced by Arris and other cable equipment stocks, but won’t necessarily make a material impact on them, an industry analyst believes.

President Obama’s support of the plan didn’t wreak havoc on shares in Arris, now the world’s largest set-top box maker following its 2014 acquisition of Motorola Home and the recently completed merger with U.K.-based set-top maker Pace plc.  Shares in Arris closed at $22.19 on Friday, down 31 cents (1.38%) for the day.

Despite the additional overhang caused by the announcement, “we also continue to see the news as more of a headline risk, rather than a material financial headwind,” Simon Leopold, analyst with Raymond James, said in a research note on Friday. “Set-top-boxes make for an easy political target, since it is not uncommon for consumers to grumble about rental fees, however we believe that consumers would not necessarily embrace the alternative of shelling out hundreds of dollars every few years for the latest STB either.”

Leopold also said implementation of any new set-top rules would be challenging as “producing universal set-top-devices that conform to all of the technologies could prove tedious and add complexity to consumers in terms of configuration and compatibility with their service provider's network.”

He’s also skeptical of the FCC’s ability to mandate such changes and expects to see the issue go to court, and pointed to historic shortcomings with the CableCARD regime (about 55 million of the modules have been deployed in MSO-supplied boxes by the top nine incumbent U .S. MSOs, versus 589,000 in retail devices, per the NCTA's latest report), and that about 14.5% of Time Warner Cable’s customers opt to buy their own cable modems.

BTIG analyst Richard Greenfield also weighed in on Obama’s backing of Wheeler’s set-top plan, calling it a win for consumers, a positive for OTT providers, and a negative for programmers (in part because more integration of OTT will present more risk to linear TV ratings) and MVPDs.

“MVPDs make money on leasing boxes and selling video packages. While the near-term impact will be less revenue from leasing boxes (offset by not having to finance building boxes to lease), the longer-term risk is the acceleration in cord-shaving/cutting/nevering reducing profits on its video service,” Greenfield wrote in a blog post (registration required).

On the other end of it, a shift to IP-based devices from third parties could also produce costs savings for MVPDs with respect to truck-rolls and customer service rep time, he added. 

READ MORE: Complete coverage of FCC chairman Wheeler's set-top plan.

The White House early Friday announced it was putting the Administration's muscle behind an effort by FCC Chairman Tom Wheeler to make set-top box information available to third parties and app developers in an effort to spur navigation device competition.

The White House did not say it was trying to promote "competition, competition, competition" -- Wheeler's mantra -- but it might as well have.

A White House blog post by Jason Furman, the President's chief economist, said that "no corporation can unfairly squeeze their competitors, their workers, or their customers at everyone’s expense."

He then cited backing the set-top proposal as example A, saying the President was "calling on the FCC to open up set-top cable boxes to competition," and adding. "This will allow for companies to create new, innovative, higher-quality, lower-cost products. Instead of spending nearly $1,000 over four years to lease a set of behind-the-times boxes, American families will have options to own a device for much less money that will integrate everything they want — including their cable or satellite content, as well as online streaming apps — in one, easier-to-use gadget."

The White House called the set-top proposal the "mascot" of a new initiative, saying it was the "stand-in" for "what happens when you don’t have the choice to go elsewhere—for all the parts of our economy where competition could do more."

That "more" will be an Executive Order to departments and agencies to make "further progress" in promoting competition across all sectors.

While the blog was not bylined by the President, it evoked his very public support for Title II reclassification by the FCC.

The National Teelcommunications & Information Administration, the President's principal communications policy adviser, signaled the White House's support in comments to the FCC Late Thursday (April 14).

"We are disappointed that White House political advisers are choosing to inject politics and inflammatory rhetoric into a regulatory proceeding by what is supposed to be an independent agency," National Cable & Telecommunications Association Preisdent Michael Powell blogged in response to the Whtie House announcement. "Consumers and regulated companies have the right to expect decisions affecting their businesses are made based on sound analysis of the record and not the political interests of the executive branch. To see the White House take political credit for the actions of the 'independent' agency and direct it to reach a specific conclusion even before the record has been assembled, shatters that faith and undermines the Commission’s credibility."

The White House announcement capped a flurry of activity on the set-top front this week, with the NCTA hosting a demonstration of navigation devices already in the market, and diversity groups arguing Wheeler's proposal could adversely affect access to diverse content and the business model that supports it.

"Perhaps the strategists at the White House believe their intervention is good politics," continued Powell, "[b]ut it is bad government, undermining the independence of the FCC and shattering any faith in impartiality and fundamental fairness. One would hope the FCC Commissioners would resist being annexed by the executive branch. But that hope is sadly faint.

"Despite our doubts, we will continue to press our concerns vigorously about an ill-considered regulatory proposal that is unlawful, unnecessary, unworkable and unfair."

"The President's support for set-top box competition virtually ensures that consumers will finally see a $15 billion per year rip-off exploded by new electronic devices streaming innovative video services that challenge cable monopolies," said Gene Kimmelman, president of Public Knowledge, following the White House announcement.

The LGBT Technology Partnership told the FCC it is "seriously concerned" about the FCC's set-top box proposal.

FCC Chairman Tom Wheeler, with the votes of the two other Democratic commissioners, has proposed making MVPD set-top data available to third party device makers and app developers as a way to promote competition in navigation devices.

In comments to the FCC the partnership focused on the protecting the privacy of that data, and their concerns the proposal did not sufficiently do that.

The partnership said lesbian, gay, bisexual and transgender community is particularly vulnerable to breaches revealing their programming choices, citing possible discrimination, job losses, bullying, and physical harms and saying being outed involuntarily can have "catastrophic consequences."

"Allowing third parties to unilaterally decide how to bundle, promote, and exhibit 'niche' and minority content, such as content created by and for the LGBT community, while at the same time allowing these third parties to 'self-certify' their compliance with privacy rules, would put at risk consumers who have come to rely on these rules for the protection of their private data," it said.

It also says the proposal could result in diverse programmers, like those serving the LGBT community, losing control of how their content is presented.

The group suggested the FCC would be better off switching gears and adopt the other, app-based, proposal--backed by cable and other ISPs--and also offered up by FCC's Downloadable Security Technology Advisory Committee (DSTAC)

The partnership also echoed criticisms of edge providers' lack of diversity in employment and leadership which reduces the clarity of the lens through which privacy protections are viewed. "Historically, these companies have been bad actors with regards to protecting customer privacy and have only changed their privacy policies when they face litigation for said policies."

"In a digital world where privacy is already limited, why would we want to provide a loop hole for companies to further track our habits?," Chris Wood, executive director of the partnership, told Multichannel News, "especially when these companies have proved over time that they are willing to sacrifice our data and privacy for their profits. Furthermore, we only need to look at recent headlines in North Carolina, Mississippi or others to see that our community is too vulnerable have companies 'self-certify' they're doing the right thing. The FCC needs to fully consider the impact this decision could have on the LGBT community and other niche or minority communities for years to come."

The partnership is only the latest in a line of diversity advocates raising red flags about the impact on programmers and privacy.

Asked about the set-top proposal, FCC Chairman Tom Wheeler said in a C-SPAN interview this week that the FCC respects programming assets. He said the FCC did not want Google substituting commercials or putting windows around it, and that if the FCC proposal language needed adjusting, it could be fixed. "If that language isn't good enough, tell us how to fix it," he said.

Wheeler has also argued the proposal would be a boon to diversity by giving independent over-the-top content providers visibility via the new navigation devices that wed traditional and OTT content.

Offering another clear signal that the set-top box business is tough sledding, chipmaker STMicroelectronics said it will scuttle development on new platforms and standard products for set-top boxes and home gateways and apply a bigger focus on silicon for connected cars and the broader Internet of Things sector.

The decision, said COO Jean-Marc Chery, to discontinue those products “is the result of an extensive review of various options” that originated last May.

The bug-out also cedes more of the STB chip market to competitors such as  Broadcom Corp., Intel Corp. and MaxLinear.

It also appears to be a blow to the emerging DOCSIS 3.1 market. STMicro had D3.1-based cable modem products in development and was considered to be key third supplier for that silicon beside Broadcom and Intel, which has been teaming with MaxLinear on DOCSIS chips.

STMicro has been asked to clarify if its decision to get out of the STB and gateway chip-making business also means the end to its DOCSIS 3.1 endeavors.  Multichannel News will update this story when the company responds. However, the company does list "DOCSIS Solutions" under the "Digital  Set-Top Box ICs" product category. 

Chery cited a slow market and M&A delays at operators and at box makers, as well as increasing competition on low-end boxes and high R&D costs as contributors to STMicro’s ultimate decision.  “And losses are unsustainable – about a half a billion dollars cumulatively in the last two years,” the exec noted.

The chipmaker’s move comes amid big shifts in the set-top market marked by consolidation and a shift toward gateway-client architectures and the virtualization of STB functions in connected devices such as smart TVs, streaming players, tablets and smartphones. On the M&A front,  Cisco Systems sold its STB business to Technicolor, and Arris, the world’s top STB supplier, recently closed its acquisition of Pace Plc.

And the decision will impact STMicro’s employees. The company said it will “redeploy” about 600 employees currently associated with STMicro’s set-top-box business to support its digital automotive and microcontrollers businesses.  That could ultimately affect about 1,400 employees worldwide -- 430 in France through a “voluntary departure plan,” about 670 in Asia and about 120 in the U.S.

STMicro expects the moves to save about $170 million per year and result in restructuring costs of the same amount.

Click here for more FCC set-top box news.

In direct response to FCC chairman Tom Wheeler's proposal Wednesday to spur traditional and online video access device competition, the newly created Future of TV Coalition said it was unnecessary and would lead to an "endless muddle of unanswered questions."

The coalition, which launched at about the same time the FCC was unveiling the proposal includes the National Cable & Telecommunications Association, American Cable Association and the Motion Picture Association of America.

"This is a solution in search of a problem. Consumers can already access pay-TV programming right alongside streaming content on an ever-expanding universe of consumer-owned devices, from smart TVs, game consoles and streaming devices to laptops, tablets, and smartphones," the coalition said in a statement. "This app-driven innovation is already happening — and it doesn’t require a government mandate that would increase consumer costs, strip viewers of privacy protections, and let third party device makers ignore the terms of carriage agreements between programmers and distributors.

The FCC proposal, as best anyone can understand it, still strips out all the tools that are used to honor license agreements, would increase consumer costs by mandating yet a second box inside the home and thus ignores the trends away from in-home boxes and devices, eliminates security protections, and provides no reassurance on privacy rights. Kicking the can down the road and simply saying that some standards setting body may address these issues, fully or partially, in the future, is hardly a guarantee for consumers, creators and distributors. Rather than moving us to a second box and an endless muddle of unanswered questions, the FCC should be moving all of us towards an app-based future that consumers are embracing.”

Click here for more FCC set-top box news.

Even as the FCC was unveiling chairman Tom Wheeler's proposal to bring competition to the set-top market by "unlocking" cable boxes and making the information available to competitors who want to wed traditional and online video content (an AllVid-like proposal), the National Cable & Telecommunications Association, American Cable Association, Motion Picture Association of America, and a host of others were unveiling the Future of TV Coalition to beat the commission to the consumer video choice punch.

The coalition, co-chaired by Alfred Liggins of TV One and Nomi Bergman of Bright House, will celebrate and promote what its 47 members say is the already thriving innovation in video experience options to provide even more choices.

Look for it to be making that point loudly to the FCC as the commission collects comments on the chairman's proposal, which was premised on the assertion that the video access device market instead needed a competitive boost because choices were few and prices high, with consumers "chained to their set-top boxes because cable and satellite operators have locked up the market."

"The ‘AllVid’ proposal is a brazen money grab by Big Tech companies that would do severe damage to the programming ecosystem, and in particular, niche and minority-focused networks," said Liggins in a statement. "Everyone who cares about quality, diverse television should let the FCC know that AllVid is a harmful non-starter.”

As NCTA argued in comments warning the FCC off an AllVid approach, the coalition said Wednesday (Jan. 27) that such an approach would allow a handful of tech companies to "replace innovation with government regulation." It said that AllVid "would force programmers and TV providers to dismantle their shows and services for these companies to repackage, reuse, and exploit without negotiating for the rights like everybody else in the market does today. AllVid would not give viewers access to any new programming or content that isn’t already available in their homes and would not replace or lower their existing television bills."

FCC officials speaking on background say their proposal would not force the disaggregation of TV content, would respect existing MVPD contracts with programmers and their subs, and would not require anyone to get a competing device if they were satisfied with their current box.

But they also signaled that they think it is necessary to "unlock" the MVPD's hold on video access devices.

Other members of the new coalition include AT&T/DirecTV and DISH.

The domestic set-top market has been tough sledding of late for suppliers, but the picture looks a tad rosier when viewed through a global lens.

Based on its latest data, global shipments of set-tops were on track to reach 253.1 million units in 2015, up marginally from 248.6 million in 2014, SNL Kagan found, attributing that small rise to demand in emerging markets such as China and India.

Broken down further, worldwide cable STB shipments were expected to hit 75 million last year, flat with 2014 totals. Satellite STB units, the market’s largest segment, were on track to account for 47% of all global unit shipments in the category in 2015, the firm added.

Shipments of set-top boxes, meanwhile, are trending lower over cost concerns and the introduction of new cloud-powered DVR offerings, SNL Kagan said, adding that HD-enabled boxes accounted for 76% of global STB shipments in 2015.

But even demand in emerging markets won’t help the STB avoid an overall decline. Looking ahead, STB product revenues will reach $14.55 billion in 2019, down from $17.5 billion at the end of 2015, SNL Kagan predicted. 

U.K.-based Pace has received the required shareholder approvals at the court and general shareholder meetings held Thursday in connection to its proposed $2.1 billion merger with Arris.

Arris stockholders holding 129,714,934 shares, representing approximately 88% of outstanding Arris shares as of the record date (September 10, 2015), approved the deal on Wednesday.

Arris sees the deal closing in “late December or the first quarter of 2016” amid additional requests from the U.S. Department of Justiceand regulators in Brazil and Colombia that could pave the way for conditions that Arris divest part of the optical transmission business of the combined company. 

A new independent audit found that a voluntary set-top energy savings agreement inked in 2012 has saved consumers more than $500 million over a two-year period.

The report, from D&R International, said the improved energy efficiency achieved by set-tops in 2013 and 2014 also avoided nearly three million metric tons of carbon dioxide emissions during that span. 

Last year's report by the same outfit found that the voluntary pact had saved consumers about $168 million in energy bills, and nearly 842,000 metric tons of carbon dioxide.

“This progress is really important because set-top boxes were estimated to draw $3 billion worth of electricity annually in 2012,” Noah Horowitz, senior scientist at the Natural Resources Defense Council, noted in this blog post about the latest audit results. 

U.S. pay TV firms, consumer electronics manufacturers and energy efficiencies advocates announced the voluntary set-top energy conservation program in 2012.

The new report said a major driver of energy cost savings was a 33% decline in the weighted average of energy consumption of DVRs, the biggest energy-sucker in the set-top box category -- over two years. 

By comparison, the report found that there was a 13% decline in weighted average energy consumption in non-DVR boxes from 2012 to 2014, and a 44% decline on “thin client” boxes. The outlier was the Digital Terminal Adapter -- simple one-way digital-to-analog converter boxes used by MSO to fuel all-digital upgrades -- which saw a 26% increase. The report noted that most DTAs purchased in 2013 and 2014 included HD and advanced video processing capability, which increased energy usage, but also found that 100% of the models purchased in 2014 still met the Tier 1 (Energy Star version 3.0) energy efficiency standards.

Overall, 95% service provider set-top purchases in 2014 met the Energy Star Version 3.0 standards, a 12% increase from 2013, the first year of the voluntary agreement, and those boxes use about 14% less energy than boxes previously issued by the service providers, the report said.

Additionally, 62% of service providers’ set-top box purchases last year (a 32% increase from the year before) already meet a set of Tier 2 energy efficiency levels, which will be the new baseline for the 90% procurement commitment in 2017.

“The Voluntary Agreement on set-top box energy efficiency is yielding energy savings for consumers and the nation,” said Jennifer Amann, Buildings Program Director of the American Council for an Energy-Efficient Economy (ACEEE), in a statement. “New set-top boxes offer updated designs and new features while reducing energy use and consumer energy bills. By meeting the commitments of the Voluntary Agreement, pay-TV companies are demonstrating that energy efficiency and product innovation go hand in hand.”

“The second Annual Report is further proof that rigorous, voluntary, private sector-driven agreements can provide comprehensive energy and related-cost savings for consumers and the country,” added Doug Johnson, vice president, technology policy, Consumer Electronics Association. “This report – an important deliverable of the Voluntary Agreement – offers transparency, public accountability and objective updates on our progress toward greater energy efficiency for pay TV set-top boxes.”

“The significant energy savings that have resulted from this voluntary industry agreement show how strongly committed the cable industry is to finding creative ways to improve the overall consumer experience,” said Neal Goldberg, general counsel for the National Cable & Telecommunications Association. “We will continue to work with our vendor community and other stakeholders to explore ways that set-top boxes and other equipment can become even more energy efficient.”

S3 Group said Sky (UK) will tap the vendor’s test automation solution to enable the pay-TV provider’s field engineers run diagnostics on set-top boxes that can rapidly determine the root cause of technical issues. 

Noting that Sky’s Home Service Field Engineers visit over 3 million customers in the UK every year, S3 said the solution will enable the service provider’s field engineers to execute a series of tests on set-tops in the home and quickly isolate whether the fault is in the hardware, or if there’s a problem with the in-home configuration.

It will do that via a series of diagnostic tests conducted in real-time using an engineer’s existing tablet device to connect to the set-top, S3 said. The results are returned in a graphical format, enabling engineers to address the problem and to provide assurance to customers that, when the fault is resolved, their STB is working correctly.

“Sky is continuously applying new technology to ensure our customers receive the very best service experience,” said Giles Harvey, supply director, Sky. “Getting it right first time is important for customer satisfaction, and operational efficiency. S3 Group have provided a reliable solution for Sky’s field engineers to efficiently test and resolve device faults during a service visit.”

“The application of automation has become essential for pay-TV providers to reduce operating costs and improve quality,” added Derek Dwyer, S3’s general manager, TV technology, S3. “This solution enables Sky’s field engineers to efficiently test a device, increases customer confidence in the diagnosis, and ultimately reduces device swap outs”.

S3’s other customers and clients include Astro, BT, Comcast, Kabel Deutschland, Liberty Global, Mediacom, RDK Management, Swisscom, Time Warner Cable, and Videotron, among others. 

As Charter Communications’ proposed acquisitions of Time Warner Cable and Bright House Networks move forward (see Cover Story), expect the angst among suppliers to build as they position themselves for the outcome.

Some could find themselves on the outside looking in, while others are firmly in the catbird’s seat. For still others, notably Arris, it presents a mixed bag.

The future is not set, of course, but here’s a snapshot of some potential winners and losers from the deal.

CABLE MODEMS/ROUTERS/GATEWAYS

Winners: SMC Networks, Cisco Systems, Netgear

On the residential end, SMC Networks and Cisco Systems are Charter’s primary suppliers of cable modems, sources have said. Netgear, meanwhile, has locked in a slot to supply Charter subs with WiFi routers, including a new high-octane model that uses 802.11ac outfitted with Charter-specific middleware.

A dark horse winner in this category is French supplier Sagemcom, said to have Charter’s gateway business for smaller business customers and to be gearing up for an aggressive residential play.

Losers: Arris, Technicolor and Ubee Interactive

These three vendors are the approved gateway suppliers for TWC’s residential broadband service, so their hold could loosen should Charter apply a modem-plus-router strategy while continuing to eschew the use of integrated wireless cable modem gateways.

SET-TOP BOXES

Winners: Cisco, Humax

They are the initial suppliers of the Worldbox, Charter’s new set-top box platform that will support cloud-based apps, including the MSO’s new Spectrum Guide, and a new downloadable security system that will enable the device to run on any Charter system.

Possible Losers: Humax, Samsung and Arris

Humax finds itself in both camps, because it has also been tapped to supply TWC with its first set-top client based on the Reference Design Kit, the software stack for Internet prototcol-capable devices being managed by Comcast, Liberty Global and TWC. Charter has not divulged any specific plans for the RDK, at least not yet (expect something on this in next week’s issue).

Samsung is a known supplier to TWC and Bright House, but has not announced anything involving Charter’s Worldbox program. However, it does supply boxes to Cablevision Systems that utilize the same “open” architecture that Charter is using in its Worldbox platform.

Arris has been supplying TWC with a souped-up six-tuner “enhanced” DVR for the MSO’s “TWC Maxx” upgrade initiative. It’s not yet known how those rollouts will continue once Charter expands its Worldbox strategy.

MISCELLANEOUS VIDEO TECH

Winners: Cisco, Arris, ActiveVideo and Zodiac Interactive

They’re all involved in the video end of Charter’s Spectrum initiative, Cisco (downloadable security), Zodiac (set-top software stack), and ActiveVideo (user interface cloud TV platform), which is now co-owned by Arris and Charter.

Also sitting pretty is Michael Willner-led Penthera, which last week announced deals to supply its secure video-downloading platform to Charter and TWC, while reupping its agreement with Comcast.

Time Will Tell: Envivio

Envivio has bet a lot of chips on TWC. On last week’s first-quarter earnings call, the multiscreen video specialist said it received significant orders from Comcast and TWC, and that those two customers represented 57% of revenue in the period.

BILLING AND CUSTOMER CARE

Winner: CSG Systems

It’s coming off a new deal with Charter that’s good through the end of 2019, and includes a framework that, presciently, allows for the consolidation of additional customers that Charter might obtain through M&A activity. CSG also has existing deals with TWC and BHN.

Arris posted lower first quarter numbers as the company continued to face uncertainty and “headwinds” amid M&A activity involving some of its biggest customers.

Of note, Comcast and Time Warner Cable broke up their proposed merger, while AT&T and DirecTV are still in the process of tying the knot.

“As we indicated on our previous earnings call, we've seen overall spending levels down from prior periods primarily due to the distractions and uncertainties associated with industry dynamics,” Bob Stanzione, Arris chairman, president and CEO, said on Wednesday's earnings call. "However, we feel great about our position in the market. We're going through a period of change that is having what we feel is a temporary effect on our business." 

Stanzione said it will “take us a while” to determine how the Comcast/TWC news will affect Arris later in the year, but believes Arris is “very well positioned in both Comcast and Time Warner with their next generation projects, and I think that we'll see business begin to improve as the year goes on.”

Arris posted Q1 revenues of $1.21 billion, down $9.8 million (1%) from the year-ago quarter, and down $48.2 million (4%) from the previous period. Adjusted net income was 44 cents per diluted share, versus 47 cents in the year-ago quarter. Those results were in-line, as analysts were expecting revenues of $1.22 billion, and a profit of 44 cents per share. 

Product Update

Arris saw decreased demand from some customers deploying stand-alone HD digital set-tops coupled with progress made with more capable video gateways with customers such as Comcast, Verizon Communications and TWC, Larry Robinson, president, customer premises equipment at Arris, said. Arris said it surpassed 4 million video gateway unit shipments in Q1.

On the network end, quarter-over-quarter CMTS revenues dropped 10% and were down moderately from record level shipments in the previous quarter, Bruce McClelland, president of network & cloud and global services, said.

Sales of E6000, Arris’s new flagship converged cable access platform (CCAP) that will factor heavily into the vendor’s DOCSIS 3.1 strategy, rose 41% year-on-year, but were down slightly from Q4 2014.

McClelland said Arris successfully completed several DOCSIS 3.1 interop events at CableLabs and expects lab and field trails to start later this year.

M&A Action

Arris also addressed two recent acquisition deals – the $135 million purchase of ActiveVideo Networks (through a joint venture with Charter Communications), and the proposed $2.1 billion play for U.K.-based Pace plc.

Stanzione said the ActiveVideo deal is expected to close “in the next few days,” and reiterated that the Pace merger, expected to close in the second half of the year, will increase Arris’s scale, international presence and give it a larger entry into the satellite video segment. The combo of Arris and Pace into the “New Arris,” to be incorporated in the U.K., is poised to have revenues of about $8 billion.

Arris was again asked about the antitrust risk posed by the Pace deal, which will combine the world’s top two set-top box makers.

“We're fairly confident based on the advance we've gotten from the experts in the area that will be able to clear that hurdle,” Stanzione said.

Stanzione also downplayed fears that the set-top will fade from existence.

“I would ask the question, what's going to replace them?  I think the answer to that question is… that there is a transition going on from video set-top boxes to advanced gateways,” Stanzione said. “We don't think it [the set-top box] goes away.”

Looking ahead, Arris expects Q2 revenues of $1.27 billion to $1.31 billion, and non-GAAP earnings of 53 cents to 58 cents per share.

Rep. Bob Latta (R-Ohio) is vice chairman of the House Communications Subcommittee and was instrumental in getting his bill ending the prohibition on integrated set-tops added to satellitereform legislation, which passed the House on a voice vote two weeks ago. He is now pushing the Senate to do the same. The bill must pass by year-end, or the satellite compulsory license, which allows cable and satellite providers to deliver distant broadcast-TV signals, sunsets. Latta talked with Multichannel News Washington bureau chief John Eggerton about that bill, Internet neutrality and the importance of freeing up more unlicensed spectrum for WiFi, a key driver of cable’s wireless broadband business.

MCN: What are the prospects for the House bill being the version that ultimately passes in the Senate?

Bob Latta: I think that when it gets over there, it has a very good chance, because I think that [House Communications Subcommittee] chairman Greg Walden (R-Ore.) and [House Energy & Commerce Committee] chairman Fred Upton (R-Mich.) have kept it pretty concise and I think it has a very good chance of remaining in the form that it is in.

MCN: Why is it important to get rid of the ban on integrated set-tops?

BL: First of all, it did not do what it was supposed to do. When the [Federal Communications Commission] did this, they took off really on their own. They had around 43 million boxes out there and I think it was less than 650,000 have been sold. It is not close to doing what it said it was going to do [promote a market in retail boxes]. The integration ban has cost at least a billion dollars to consumers and operators out there.

At one of our hearings on an entirely different matter, the Secretary of Energy mentioned the amount of energy that is being used by the boxes. So, I think it is a win-win. It will help the operators and consumers will have lower energy bills.

MCN: What are the prospects for your bill opening up more unlicensed spectrum for WiFi in the 5-GHz band?

BL: I was at a meeting the other day [where someone said] that by 2017, there will be about seven different devices per person that are going to be using spectrum. So, when you have so much of the spectrum being used out there, you want to help the Department of Transportation and [the National Telecommunications and Information Administration] do testing on the upper band. We want to make sure we can utilize it. We’ve got to be able to expand our spectrum usage.

MCN: You have expressed concerns about FCC process lately.

BL: As the two Republican commissioners said, they need to put out information more than a few minutes before [a meeting].

MCN: You’re no fan of Title II reclassification of Internet access either.

BL: When you look at Title II, and this goes to the whole technology side. We’re going to take it back to the 1930s and regulate it that way when this has been an industry where there has been about $1 trillion spent on the private side and it’s been working well? A regulatory process that drags on and on is going to kill innovation in this country. Look at the number of jobs that have been created over the last decade. This has been a wonderful sector for the economy because of job growth.

MCN: FCC chairman Tom Wheeler thinks that Section 706 authority is the way to go, but do you fear Silicon Valley’s push for Title II could be too strong?

BL: I get to Silicon Valley every 18 or so months and what those folks are doing out there is absolutely amazing. A lot of us think that old law shouldn’t be applied to new technology.