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FCC Opens Gateway Proceeding

The FCC Wednesday (April 21) launched an inquiry into a
smart video device platform it says will help spur broadband adoption and
promote the investment and competition that is something of a Hippocratic oath
for broadband. At the same time, it issued a notice of proposed rulemaking on a
number of changes to the CableCARD regime that separates channel-surfing and
security functions in cable set-tops.

That came at the FCC's April public meeting Wednesday, where
the commission officially launched implementation of the national broadband
plan. Both votes were unanimous.

The FCC's ultimate goal is to come up with a
"gateway" platform that works with all multichannel video providers
and that will "spur innovation, draw users to broadband, and change how
people perceive and use broadband."

That inquiry is the first step toward implementing the FCC
national broadband plan of opening up the market for access to MVPD service and
uniting access to broadband and traditional video delivery since 99% of homes
have TV's, while more like 75%-80% have computers.

The inquiry asks for comment on developing an interface
device in the home for "all consumer devices," which the FCC says
will achieve four key goals:

1) Spur investment and innovation in the market for retail
devices that work with any pay TV service

2) Allow providers to innovate and compete in offering
services without requiring consumers to switch devices

3) Generate more competition and consumer choice.

4) Encourage wider broadband use and adoption.

"Just as a shopping malls present customers with
numerous retail outlets, smart video devices would offer viewers a single
window into pay TV content and Internet content," said FCC Chairman Julius
Genachowski. He said he recognized that the proposal was only one approach and
that the inquiry will give others the chance to propose other ways to achieve
those goals. He said that whatever they did, prompt action was needed.

The CableCARD proposals, he said, are intended, in the
interim, to improve the transparency of CableCARD charges, streamline
installation and increase functionality of retail CableCARD devices.
"These simple changes...should have a direct and immediate impact on the
effect of the CableCARD regime while we work on a more innovation-enabling

The goal, per a congressional mandate, was to spur a retail
market in the boxes, which was the FCC's intention in mandating the separation
of surfing and security. "That approach, as is very widely recognized, has
not achieved its objective," Genachowski said Wednesday. He pointed out
that only a "tiny fraction" of all set-tops include CableCARDS, and
said only two companies sell devices at retail that integrate pay TV and
Internet content.

Commissioner Meredith Attwell Baker was not present to vote
on the host of items due to the death of her mother earlier this week. Her vote
was still being recorded electronically and reflected in the record.

The National Cable & Telecommunications Association has expressed concerns about a one-size-fits-all standard gateway device, but NCTA President Kyle McSlarrow said Wednesday the group welcomed both the notice of inquiry and what it called the "targeted" examination of the CableCARD regime, which both FCC and industry agree has not worked.

He was particularly pleased with the CableCARD proposal to allow the industry to deploy HD Digital Terminal Adapters. "Low cost digital adapters are a vital tool for all cable systems to recapture bandwidth that can be used to provide consumers with faster broadband speeds, more HD channels, and other interactive services," he said in a statement.

He also said he was pleased the notice of inquiry seemed to square with consumer principles on video devices NCTA proposed to the commission, "especially in its recognition that the appropriate solution must involve all multichannel video providers," he said.