The Federal Communications Commission's approval last week of the plug-and-play agreement between the cable industry and consumer-electronics manufacturers promises to usher in a new era in the way cable television is marketed and delivered to consumers.
But how the agreement goes from paper to practice will have to be hashed out — and soon, given Matsushita Electric Corp.'s plans to start shipping within 90 days a Panasonic-branded, 53-inch cable-ready HDTV set priced at $2,300.
Meanwhile, the cable and CE industries will be able to accelerate a follow-up agreement covering the more prized interactive cable-ready devices able to support services such as video-on-demand.
For Matsushita, the FCC approval "validates the direction we were going," said Ed Wolff, vice president of merchandising at Panasonic Display Group, who was one of many CE voices rejoicing at the announcement.
Cable operators were equally pleased. Mark Coblitz, Comcast Corp.'s senior vice president of strategic planning — and one of cable's lead negotiators — was gratified that the FCC's decision was unanimous.
"It's nice to see a 5-0 vote," he said.
The FCC's approval will set in motion a series of events. TV set manufacturers now have a clear green light to build cable-ready sets. Those that aren't in the market by Christmas will likely have sets available by late 2004.
Lead cable-gear makers Scientific-Atlanta Inc. and Motorola Inc. have orders from MSOs in hand, and their Cable Television Laboratories Inc.-certified CableCARDs are in volume production for distribution later this fall.
The big question now is: How many cards will be needed in the short term? To date, only Panasonic is set to roll out CableCARD-enabled TV sets for this holiday season.
"We are not ready to make a million of them by November," said Tony Wasilewski, S-A's chief scientist. "But we are probably looking around the 10,000 or tens-of-thousands zone."
With immediate consumer demand a question mark, industry players have come to informal agreement on the matter, added Carl McGrath, Motorola's vice president and general manager of digital consumer gateways. Motorola is planning on about 20,000 to 30,000 cards initially.
"I think the good news is there has been quite a lot of sidebar communication between the MSOs and at least some of the CE operators," he said. "Everyone knows this is not going to work if something just comes out of the closet and intends to sneak in on the network."
The developing strategy goes something like this: Consumers would buy a cable-ready set from a retailer, and would receive a
CableCARD, initially from the cable operator. In the early days of the rollout, cable companies might dispatch a technician to install the box and card.
"The general thinking has been that early installs will probably be dealt with by an installer, just to get a feel for what they might not have anticipated," McGrath said.
When inserted, the CableCARD collects the digital certificate information from the box and sends that along with its own identity information to the headend. The headend then acknowledges that specific combination card and box — effectively wedding the two devices — and authorizes the service for that card-box combination.
If a consumer buys another cable-ready set and wants to use the same CableCARD, it has to be reauthorized from the headend, Coblitz said. Likewise, a CableCARD in use in a TV set in the living room would not work on another TV set in the den.
MSOs are planning trials later this year with Panasonic to work out the operational bugs. Time Warner Cable has targeted Minneapolis, said Kevin Leddy, senior vice president of strategy and development. "We really want to make sure the cards work correctly and we'll roll trucks to deliver PCMCIA cards," he said.
Cox Communications Inc. plans similar tests using technicians to handle CableCARD installs. "These customers are really going to mirror the HD consumers that we have," said Kevin Hill, director of marketing for video services.
But while some TV makers plan to hit the market with one-way integrated digital-cable TV sets, the traditional cable box makers aren't rushing out CableCARD-enabled boxes.
While Motorola will make the CableCARDs a standard part of its product lineup, it doesn't plan to develop one-way boxes initially, opting to wait for the more crucial two-way plug-and-play agreement calling for interactive cable-ready devices.
"We are actively looking at boxes that would want to hit the market no later than the prime shopping season for 2004. Now, do we realistically think bi-directional will be done by then — I don't know," McGrath said. "What's likely to happen is we will have to bring out that particular line of set-tops, perhaps initially in one-way mode, and then if we are as accurate at knowing what two-way will have to be, then we might be able to swap in a two-way CableCARD with no upgrade — that would be the ideal world."
Given that its cable MSO customers are focused on interactive boxes, Pace Micro Technology Americas has no plans to develop one-way CableCARD-enabled set-tops, according to president Neil Gaydon.
"For now, two-way looks the right way to go," he said.
S-A, meanwhile, is now in retail trials with Cox for non CableCARD boxes.
"So I think we are probably looking at that for the near term," Wasilewski said. "I would think that in the next year, and by next Christmas, you will have more devices that have the CableCARD slot, and they will probably be the full-featured devices like an (Explorer) 8000."
The outfit that might see the greatest short-term impact from the FCC decision is CableLabs. The agreement has attracted a herd of TV manufacturers, many of which are relatively new to the cable technology game.
"We'll have a flood — in fact, it is here today," said Don Dulchinos, vice president of advanced platforms and services. In addition to two companies seeking OpenCable certification for TV sets, "we also have more than 10 major TV manufacturers here. They are not all ready to apply for certification, certainly, but they are all here. Our lab is full."
CableLabs management thinks it can accommodate that testing traffic for now, but it also has duties related to the developing two-way plug-and-play agreement. That includes jelling the OpenCable Applications Platform middleware specification and coming up with a test plan by the end of the year.
While the one-way accord has been approved, the MSOs see the two-deal as the end game, since one-way TVs wouldn't allow for VOD or interactive guides. "We're really bullish on two-way," said Cox's Hill.
Weekly digest of streaming and OTT industry news
Thank you for signing up to Multichannel News. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.