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Intel Pushes D.C. Agenda

The TV business has a new enemy in Washington: computer-chip giant Intel. Suffering eroding market share in its core business of supplying microprocessors for PCs, Intel is trying to compensate by launching products that will compete with TV stations and cable operators.

Intel President Paul Otellini is aggressively positioning the company to be a key supplier for an array of new communications equipment, and Intel's lobbying team in Washington is waging three major policy fights against the TV business.

One Intel priority is to push the FCC, over broadcasters' objections, to make TV stations share their channel space with high-speed wireless networks that city government or other operators could set up without bothering to get a license. The company is also trying to persuade Congress and the FCC to set a quick deadline for making stations go all-digital and return their old analog channels to the government.

Intel is taking on cable operators, too, by calling on the government to stick with rules designed to create retail competition to the leased set-top boxes that have fattened cable-industry profits for decades.

Broadcasters and cable operators might be threatened by Intel's Washington agenda, but consumers will benefit from the proliferation of new broadband options, says Peter Pitsch, Intel's director of communications policy. “People will be able to communicate using laptops not only over the Internet but also with new voice and video capabilities.”

Winning FCC approval for unlicensed wireless networks would allow Intel to supply chips needed to drive Wi-Max networks, which are similar to Wi-Fi but can cover an entire town or county rather than small areas like buildings.

Intel's determination to help roll out Wi-Max networks in the TV channel band gives credence to an FCC theory that engineers have believed for years. The commission's researchers predicted it could be a quick and easy way for consumers to communicate without intermediates like TV stations or phone companies. Until Intel stepped up its lobbying, however, broadcasters had successfully limited the idea to the scientists' drawing boards and the threat of FCC approval was remote.

“Intel is the major force behind unlicensed devices,” says Greg Schmidt, lobbyist and director of new technology for LIN Television.

The FCC has permitted unlicensed use in plenty of other swaths of communications spectrum—everything from Wi-Fi to TV remotes. TV stations even share channels with a few very low-power products such as garage-door openers. But Wi-Max is the first to pose possible interference to TV signals.

If the FCC can't be persuaded to drop the idea, broadcasters are at least trying to postpone it until they have finished the switch to all-digital TV and fine-tuned their signals to accommodate unforeseen transmission quirks. Jamming unlicensed networks into TV channels now could reduce the amount of vacant spectrum and eliminate the flexibility stations will need to adjust their signals.

“It seems kooky to permit anyone to set up unlicensed operations when the entire broadcast spectrum is so fluid,” Schmidt says.

But Pitsch says it is increasingly unlikely that unlicensed networks will interfere with stations in any way. Unlicensed users would be prohibited from interfering with TV stations, and new communications equipment can detect TV signals and automatically shut off networks that pose harm.

In its brawl with cable operators, the chip maker wants the FCC to retain rules that would force cable to radically redesign the set-top boxes cable operators lease to subscribers, beginning in July 2006.

Under the rules, cable operators could no longer lease set-top boxes that combine the encryption needed to prevent programming with channel surfing and interactive functions. The FCC banned all-in-one boxes to encourage a retail market for interactive-TV services.

NCTA argues the retail market is already developing and keeping cable operators from offering integrated equipment. It says the proposed changes would needlessly drive up consumers' costs. Cable lobbyists complain that the FCC was leaning towards at least postponing the ban until Intel launched a late-hour lobbying blitz in December.