Cable, DBS Oppose FCC Rule Changes Sought by TiVo

Several commenters cited a court ruling Friday throwing out FCC cable ownership caps (CD Aug 31 p3) as providing further evidence that cable operators face stiffer competition than they had. The U.S. Court of Appeals for the District of Columbia Circuit “agreed that this is precisely the case,” the NCTA said. Comcast pointed to a statement in the ruling that the record “is replete with evidence of ever increasing competition among video providers.” But Free Press said the decision should prompt the FCC to quickly begin a “broad inquiry” on cable consumer issues, including rising prices for video subscription and set-top box rentals.

“Consumers are confronted with mounting costs and diminished choice with regard to programming, set-top boxes, and interactive program guides,” said Free Press, a frequent opponent of broadcast and cable industry consolidation. “The costs of service packages have steadily increased despite claims of ‘vigorous competition’ from wireline and satellite video competitors. Not only are consumers being gouged on the price of service packages, they also face unjustifiably high equipment costs,” with the price of set-top boxes rising 60 percent from 2007 to $15.95 monthly on average in 2009. “Cable operators can charge exorbitantly high rates for set- top boxes because consumers have few alternatives than to rent equipment from the cable company.”

TiVo wrongly believes that “all advances in cable system technology and security must be backward-compatible to TiVo’s installed base” of DVRs, the NCTA said. “TiVo makes a host of unfounded claims: that the cable industry is closed to consumer electronics (CE) innovation and is not supporting CableCARDs; that innovations in IP, switched digital, and downloadable security, and the waivers and orders that allow them, are threatening ‘common reliance,'” and that all pay-TV providers must use the same conditional access technology. “Cable’s collaboration with the CE industry is also illustrated in how it works with TiVo,” the NCTA said. It said the industry made its systems communicate with TiVo’s latest series of DVRs to “overcome the device’s one-way limitation,”

The commission’s decade-long exemption for DBS providers from the integration ban -- allowing them to combine security and navigation functions -- should remain, contrary to TiVo’s request, DirecTV said. “Satellite set-top boxes remain commercially available and portable today. DirecTV’s set-top boxes can still be used anywhere in the country. They are still produced by multiple vendors, soon to include TiVo itself.”

Since the FCC’s most recent pay-TV competition report - covering the 12 months through June 2006 and released days before Kevin Martin’s left as chairman -- the number of U.S. homes that can buy video programming from AT&T or Verizon has risen by a factor of 10, to 28 million, Comcast said. The two telcos plus Dish Network and DirecTV added almost 800,000 video subscribers last quarter, the cable operator said. Comcast said 10 percent of its cable systems are all-digital and more than one-third are “actively engaged in the process of converting.” By year-end, one-third of systems will be all-digital, the company said.

Cox Communications said its use of switched digital technology, or SDV, allows the typical cable system that it owns to add 48 HD channels. “This technology allows cable operators to offer consumers more channels by transmitting only the signal of a channel in use on its network instead of transmitting all the channels available at one time,” the company said. In northern Virginia -- the first market where Cox installed switched digital, in 2007 -- the operator said it has added 24 HD channels and 27 standard-definition digital networks, “including many niche channels that likely would have been sidelined without SDV.”