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CEA & Co.: Cable Is All Wet on AllVid

A coalition of consumer electronics companies and public interest groups say the cable industry has not demonstrated any progress towards a robust retail market for set-tops and is instead trying to forestall commission action to create that market.

"In fact, they confirm that after a decade and a half of product demonstrations and announcements, the mandate established by Congress in Section 629 remains unfulfilled," said the groups, led by the Consumer Electronics Association, in a letter to FCC Chairman Julius Genachowski.

That came in a response to a July 7 letter by National Cable & Telecommunications Association President Michael Powell.

As the FCC contemplates whether and how to spur the creation of a universal gateway for traditional and Web video content -- per its open AllVid proceeding -- as well as spur a retail set-top market, Powell argued in his letter that the marketplace can handle, and is handling, the heavy lifting on both those fronts.

He noted examples of set-top boxes already combining TV and Web content. One of the reasons the FCC launched the proceeding, in addition to trying to goose the retail market in set-tops, was to drive broadband adoption by more seamlessly wedding online and traditional content in the TV set since 99% of the population already has a TV, compared to only 80%-85% with computers. He also pointed to the TV Everywhere expansion to smartphones and tablets, cloud-based interfaces from Comcast enabling new apps, social networking and searchable guides, home networking and more.

Powell said the recent Cable Show in Chicago had provided evidence of that progress.

But CEA and company had an entirely different takeaway. "The NCTA letter invites you to conclude that there is more competition today in the device market. But the opposite is the case.... What the panel discussions and the demonstrations at the Cable Show showed most clearly is that the industry is moving toward IP-based program distribution. A failure by the Commission to move in parallel to a standards-based IP home-network interface would be a failure of potentially historic proportions."

And all those innovative approaches Powell was talking about? CEA called them incremental achievements, and pointing to them a tactic NCTA has used before to forestall commission action.

NCTA's letter touts "innovative approaches" while omitting the fact that none will support the operation of a device on more than one MVPD's services," says CEA. "Nor is there any assurance that the demonstrated products will operate on all, many, or most of the systems owned by the MSO for whose services they are specifically designed."

CEA did find one point of agreement with Powell: "The marketplace is at a critical juncture." But they say NCTA's path leads to a walled garden where devices MVPD's deploy "system-specific" devices that frustrate competition and innovation.

The FCC has proposed wedding video from cable, satellite, broadcasters and the Internet in a single, all-video device, in part as a way to use the 99% penetration of TV sets in U.S. households to drive broadband adoption.

In addition to CEA, groups signing on to the letter included the Consumer Electronics Retailers Association, the Open Technology Initiative, Media Access Project and Public Knowledge.