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FCC's Bill Lake: Time Of Separate TV and Net Is Ending

FCC Media Bureau Chief Bill Lake says the FCC should consider spurring more competition and variety in the set-top box market as one way of helping spur broadband adoption.

That came in a presentation at the FCC's open meeting Wednesday on the status of the national broadband plan and the gaps to rollout and adoption that need to be bridged.

Lake said that the TV and home computer were merging and that television could help drive broadband adoption.

While TV and the Internet have historically been separate, he said, "that time is coming to an end." The two are becoming a single, combined medium, he said, and the marketplace is now looking for a better way to connect the two.

He pointed out that Tivo users can stream Netflix movies, and some brands of TV sets can access Blockbuster movies and YouTube. Given that TV has 99% penetration in U.S. households vs. 76% PC penetration, he said that TV could help "pull" broadband into homes.

But he also said that the FCC's effort to spur a retail market in set-top boxes has not panned out and had failed to spur innovation and variety.

He said the data suggested there were only 14 models of retail box vs. almost 900 mobile devices, and that 42 times as many subscribers lease their boxes from multichannel video providers as buy them.

He said it was worth looking into whether the FCC could spur adoption by stimulating a "livelier market" in set tops.

In a press conference following the meeting, FCC Chairman Julius Genachowski said the set-top issue needed more input and data, but was not contemplating any specific changes to the set-top box regime.

"I think it is premautre to say we are contemplating any changes," he told reporters following the meeting. "What you saw today was an identification of a gap, of an issue, that over the coming weeks the broadband team will want to be getting more information on."

The National Cable & Telecommunications Association said that since the FCC was looking at the issue, it "welcome[d] the opportunity to explore repealing the counterproductive rule that requires a CableCard to be inserted in all leased set-top boxes, which imposes unnecessary costs on consumers.”

That was the rule the FCC used to separate the surfing and security functions of boxes and, it hoped, in the process create that retail market for boxes.

“Our industry continues to support and encourage consumer electronics manufacturers to produce TVs and other devices that allow consumers to access the Internet," said NCTA President Kyle McSlarrow in a statement. "Moreover, we were the first industry to publicly propose that consumers should be able to access the video offerings of cable, telco and satellite providers with any device purchased at retail. Such a solution would spur the kind of innovation at retail that we and the Commission believe would meet consumer demand."