COMMENTS OF PUBLIC KNOWLEDGE, MEDIA ACCESS … comments PK... · comments of public knowledge, media access project, and new america foundation ...

BeforetheFederalCommunicationsCommission

Washington,D.C.20554IntheMatterof )

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ImplementationofSection304oftheTelecommunicationsActof1996

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CSDocketNo.97‐80

CommercialAvailabilityofNavigationDevices

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CompatibilityBetweenCableSystemsandConsumerPremisesEquipment

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PPDocketNo.00‐67

COMMENTSOFPUBLICKNOWLEDGE,MEDIAACCESSPROJECT,ANDNEWAMERICAFOUNDATION

JohnBergmayer AnjaliBhat1818NSt.NW,Suite410WashingtonDC20036(202)861‐0020 PublicKnowledgeMatthewF.Wood1625KSt.NW,Suite1000WashingtonDC20006(202)232‐4300MediaAccessProjectBenjaminLennett1899LSt.NW,Suite400WashingtonDC20036(202)986‐2700NewAmericaFoundation June14,2010

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TABLEOFCONTENTS

SUMMARYANDINTRODUCTION……………………………………..………………………...…………3DISCUSSION…………………………………………………………………………………………………...……8

I. CableCARDIsVitalToIncreasingVideoDeviceCompetitionToday…………………………………………………………………………………………...……..8

II. TheCommissionShouldRequireGreaterTransparencyInCableCARDBillingThanItsCurrentRulesPropose…………………………………………………………..10

III. CableCARDSShouldNotRequireProfessionalInstallation………………………...13

IV. MultistreamCableCARDSShouldBeStandard…………………………………………..15

V. AnyCableCARDDeviceThatDoesNotHarmTheNetworkShouldBe

Certified………………………………………………………………………………………....….16

VI. Two‐WayCommunicationBetweenDevicesRemainsImportant,ButTheCommissionShouldAllowInterfacesOtherThanIEEE1394…………….….16

VII. TheCommissionShouldRequireCableOperatorsToAcceptABroadband

ReturnPathtoEnableTwo‐WayFunctionalityOnCableCARDDevices…18

VIII. CommonRelianceRemainsAnEssentialPrincipletoEnsureProperCableCARDSupport…………………………………………………………………………...20

CONCLUSION....…………………………………………………………………………………………………..22

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SUMMARYANDINTRODUCTION

TheCommissionhasadmittedthatitsattempttoimplementSection629of

theCommunicationsActhasfailed.1Thatattempthasnotsatisfactorilyfulfilledthe

promiseofCableCARD.Thissmall,cable‐suppliedpieceofelectronicscaneasilyslot

intoanycompatiblevideorecorder,television,PC,orotherdevice,andisdesigned

togivethemaccesstothefullrangeofcablecontent.ButtheCommissionallowed

thecableindustrytoconstructformidablebarrierstoadoptionanduseofsuch

technologybydevicemanufacturesandconsumers,whichsuppressedthesupplyof

andthedemandforCableCARDdevices.Itdoesnotmatterwhetherthecable

industryintendedtocreatebarrierstoentryorifthesebarriersarosefroma

genuineefforttoprotectconsumers.TheFCC’sapproachpermittedthesebarriers

andthusdidnotsatisfytheCommission’sstatutoryobligationtofostera

competitivemarketinvideodevices.

Consumersdeservebetterthantoday’shalf‐functioningCableCARDsystem.

ThecurrentregimedoesnotimplementthewillofCongress,preventseffective

competition,stiflesinnovation,andsaddlesconsumerswithunnecessarilyhigh

devicerentalfees.TheCommissiontoooftenhasbeenpersuadedbycable

operators’argumentsaboutshort‐termcostsavings,whileignoringthebigger

picture.Asinalltrulycompetitiveandcontestablemarkets,acompetitivemarket

forvideodeviceswoulddrivecostsdown,andwouldprovideproductsatevery1ImplementationofSection304oftheTelecommunicationsActof1996,FourthFurtherNoticeofProposedRulemaking,FCC10‐61,CSDocketNo.97‐80,Apr.21,2010¶1(hereafter“FNPRM”).

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pricepoint.Insteadoftakingthenecessarystepstocreatemarketconditionsthat

wouldallowcompetitiontothrive,theCommissioninsteadrepeatedlywaivedits

requirementthatallnavigationdevicesbeCableCARD‐based,thusensuringthat

compliantdeviceswouldberelegatedtonichestatusandunabletoachieve

economiesofscale.TheCommissionhasallowedthecableindustrytowithhold

supportfortwo‐wayservicesonCableCARDdevices.Ithasallowedthecable

industrytoobstructcompetitorswithanunnecessarilytime‐consumingand

expensivedevicecertification.Becauseofallofthis,thecableindustry’s

“predictions”thatconsumerswerenotinterestedinbuyingvideodevicesatretail,

andthatcompetitivelyprovidedvideodeviceswouldalwaysbemoreexpensive

thancable‐supplieddeviceswithoutCableCARDs,becameself‐fulfillingprophecies.

Thecableindustrynowpointstothelackofamarketduetothepresenceofthese

barrierstoentryasareasonfortheCommissiontogiveupandignorethelaw,.

ThemarketpowerofthelargestMVPDs(bothovercustomers,andas

purchasersandproducersofprogramming)meansthattailored,proactiverulesare

neededtopromotecompetition.Competitionhasbroughtlowerpricesand

innovationinallothermarketsfor“consumerpremisesequipment.”Afterall,the

telephonesandPCsweusetocommunicatearenotrentedfrom

telecommunicationscarriers,butpurchasedatretail.Attimes,theCommissionhas

hadtostepintopromotethiscompetition.BeforetheCommissionissuedthe

Carterfonedecision,andfolloweditupwiththePart68rules,AT&Tclaimedthata

competitivemarketfortelephoneswouldharmthenetwork,harmconsumers,and

driveupprices.Itsargumentswerefalsethen;cable’sarefalsenow.Theevidence

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showsthatcompetitionworks.Theburdenshouldbeoncabletodemonstratewhy

itsindustryisdifferentfromtheotheronesintheCommission’sjurisdiction.

AstheNationalBroadbandPlanfound,themorelimitedinnovationand

successonthe“thirdscreen”ofthetelevisionset–whencontrastedwithPCsand

mobiledevices–haslimitedbroadbandadoption.2Bringingnext‐generation

servicestoallhomesmeansthattheremustbecompetitionamongdevicesthatcan

easilycommunicatebothwithMVPDservicesandbroadband.Competitioninthe

marketforvideodeviceswillincreasethevalueofbroadbandtomanyconsumers

andensurethattheneedsofallconsumers—notjusttheyoungtech‐savvycrowd

withlotsofdisposableincome—aremet.

Thecoststoconsumersdonotcomeonlyintheformofrentalfees,norin

beingstuckwithexpensive,boringdevices.Therearealsotheopportunitycoststhat

affecttheeconomyasawhole,asthecompaniesandinnovatorswhowouldhave

enteredthemarketforcable‐connectedvideodeviceshavebeendiscouragedbythe

barrierstoentry,andbylimitedopportunitiesforsuccessinthefaceofcable

intransigenceandFCCinsouciance.Somecompanies(mostnotablyTiVo,butthere

areothers)havesloggedthroughtheproceduralandeconomicbarrierstoentryand

developedsuccessfulproductsthatdependonCableCARDregardless.Butthere

shouldbemorecompanieslikeTiVo.Thetechnologistswhowouldhavefounded

thenextTiVosawthebarrierstousingCableCARDandmovedon.SteveJobs

specificallycitedcableindustrytechnologybarriersasareasonthattheAppleTV

2CONNECTINGAMERICA:THENATIONALBROADBANDPLAN(2010)49‐50(hereafter“Plan”).

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didnotsupportTVtuningandrecording.3InsteadoflobbyingtheFCCtochangethe

rules,Appleworkedonotherthings.AlmostallInternetvideoandover‐the‐top

services—companieslikeRoku,Boxee,andVuze—aredesignedtobypasscable‐

suppliedvideo.Attemptingtointeroperatewiththemostpopularsourceof

programmingisjustnotworththelegal,financial,andcustomerservicehasslefor

eventhebrightestofengineers.Customersleasemoredevicesthantheypurchase,

andmanufacturersdonotproducemoredevices,becausetherulesarerigged

againstdevicecompetition.CableCARD’slimitedsuccessshouldnotbetakenas

evidencethat,uniquelyamongcommunicationsservices,cabledevicecompetitionis

undesirable.Ifthatweretrue,innovatorswouldnotspendsomuchtimeandeffort

tryingtocircumventthecurrentbarrierstointegratingdeviceswithprogramming.

ThelessonofCableCARDisthattheCommissionshouldnotdelegatetoanindustry

theobligationtocreatealevelplayingfieldthatsaidindustryperceivesas

fundamentallyopposedtoitsowneconomicinterests.

ThisproceedingisavitalfirststeptotheeventualrealizationoftheAllVid

system,whichwillbringthebenefitsofchoiceandinnovationtothecustomersofall

MVPDs.IthasbeenclearformanyyearsthattheprimaryobstaclestoCableCARD’s

successhavenotbeentechnological,butrelatedtobilling,support,and

certification.4TheworktheCommissiondoesinthisproceedingwillbedirectly

3RyanBlock,SteveJobsLivefromD2007,ENGADGET,May30,2007,http://www.engadget.com/2007/05/30/steve‐jobs‐live‐from‐d‐2007(“TheminuteyouhaveanSTByouhavegnarlyissues,CableCARD,OCAP...thatjustisn'tsomethingwewouldchoosetodoourselves.”).4TheBroadbandPlanindentifiedfourprimaryfactorsholdingbackCableCARD:accesstotwo‐waycontent,pricing,support,andcertification.Planat52.Whilethefirstoftheseispartlyatechnologicalissue,asdiscussedbelow,choosingan

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applicabletoAllVid.Evenso,thefactthatsomethingbetteriscomingdowntheroad

isnoexcuseforneglectingtofixwhatwehavetoday.Commenterslookforwardto

participatingintheAllVidproceeding.AllVidwilldothingsthatCableCARDcan

neverdo,suchassupportallMVPDs,andnotjustcable.Itisabettersolutionfora

convergedIPenvironment.ButitmaytaketimeformanufacturersandMVPDsto

deployAllViddevices,andatleastsomeCableCARD‐equippeddevicesareinthe

storesandinconsumers’homestoday.TheCommissioncanandshouldadopta

numberoftargetedfixestomaketheCableCARDregimeworkasinitiallyintended,

evenastheCommissionadvancesonAllVid.

Whileagoodfirststep,theFNPRM’sproposedrulechangesdonotgofar

enough.ThenewrulesshoulddemonstratetheCommission’scommitmentto

makingCableCARDwork.Surgeryisneeded,notjustabandage.TheCommission

cannotallowthenextseveralyearstobecomeawaitinggameascablecontinuesto

delayeffectiveimplementationofCongressionalpolicy,thistimeusingthecoming

ofAllVidasanexcuse.TohelptheCommissionachievethisgoal,thesecomments

addresssomeoftheissuesraisedintheFNPRMandthensuggestdraftrulesthat

wouldbetterachievetheFNPRM’sstatedgoalofimprovingtheCableCARDregime.

TheCommissionmustbearinmindthatCableCARDisessentialtoincreasing

devicecompetitiontoday.Despitethefailuresanddelaysofthepastdecade,there

areCableCARDdevicesinthefield.TheCommissioncanachievequickresultswith

focusedrulesprovidingforgreatertransparency,whichwillenablecustomersto

makeinformedchoicesaboutthevaluepropositionofrentingversusbuying,andapproachtoallowCableCARDdevicestocommunicateupstreamisapolicyquestion.

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whichwilldiscourageunlawfulcross‐subsidization.TheCommissionmustremove

thelogisticalbarriersthatobstructtheuseofretaildevices,suchasthe

requirementsforprofessionalCableCARDinstallation,ortheprovisioningofsingle

streamratherthanmultistreamcards.Whilestillrecognizingthatstandard

interconnectioninterfacescanpromoteacompetitivemarketbyallowingdevices

fromdifferentsourcestoworktogether,theCommissioncanaddflexibilityby

allowingothermodern,IP‐capableinterfacestobeusedinsteadofjustIEEE1394.

Finally,itcanmakesurethatretaildevicescompeteonalevelplayingfield,by

requiringcableoperatorstosupportabroadbandreturnpathtoenableupstream

communication,andbyrethinkingitsproposaltoseverelyhampertheprincipleof

commonreliance.

DISCUSSION

I. CableCARDisVitaltoIncreasingVideoDeviceCompetitionToday

CableCARDexiststoday,andsimplefixestotheCommission’srulescan

knockdownsomeofthebarriersthathavelimitedthistechnology’ssuccess.The

Commissionmustrememberthiswhenitgathersdataaboutwhether“technical

developmentsoverthelastdecadehaveovertakentheCableCARDmodel.”5A

gatewayapproachismoreappropriatefortheheterogonousnetworksthatmakeup

theentireMVPDmarketplace,whichisonereasonthelimited‐functiongateway

approachproposedbytheAllVidNOIisamoreappropriatesolutionforthefuture.

But,astheCommissionpointsout,“thecableandconsumerelectronicsindustries

5FNPRM¶12.

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haveinvestedheavilyinthe[CableCARD]technology….”6TheCommissionshould

taketheseinvestmentsandrelianceinterestsintoaccountwhendeterminingapath

forward.7Furthermore,iftheCommissionistoachievethegoalsofSection629in

thenearterm,itmustfix,andnotabandon,theCableCARDsystem.

MostoftheflawswiththeCableCARDsystemarenottechnological,but

economic,procedural,andsupport‐related.Thesecanbeaddressedwithafew

targetedfixes,followedupbyproperenforcement.Manyofthesameissuesthatface

theCommissioninAllVidcontextfacetheCommissioninthisproceeding,andcan

beaddressednow.Here,theCommissionhastheopportunitytocraftrulesabout

customersupport,thatpreventcross‐subsidizationbetweencable‐operator

supplieddevicesandcableservice,andthatensurethatanynecessarydevice

certificationisquickandpainless.Forexample,underAllVid,ifMVPDsare

permittedtosupplytheirownCPEbeyondthegateway,theymustnotsubsidize

devicecostswithservicefees.ThesameistrueofCableCARD.Commenters

thereforeurgetheCommissiontomakethemostofthisopportunityandcraft

ambitiousbutworkablerulestopromoteatlastacompetitiveretailmarketfor

navigationdevices.

TheCommissionalsoaskswhetheritshouldcontinuetherequirementthat

NCTAandCEAfilequarterlyreportsonthestatusoftheirtwo‐waynegotiations.

ThisrequirementissymptomaticofthefailingsofthepreviousCableCARD

approach,whichreliedtoomuchoninter‐industrynegotiations,andthe6Id..7FCCv.FoxTelevisionStations,129S.Ct.1800,1811(2009)(agenciesmusttakefactssuchasrelianceinterestsintoaccountwhendeterminingwhethertochangetheirpolicies).

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Commissionshoulddropit.Whilevoluntaryandindustry‐ledstandards‐setting

proceduressometimesmaybepreferabletoFCCinvolvement,thesearenot

workablewhenthenegotiatingpartiesbelievetheyhaveopposinginterestsand

cannotachieveconsensus.Ratherthanrequiringsuchindustriestocontinuetheir

fruitless“negotiations,”theCommissionmustpreparetostepinandmakedecisions

astohowitwillcarryouttheCongressionalmandateofSection629.The

Commissioncannotdelegateitsresponsibilitiestoindustryandthendonothing

whenthisapproachfails.

II. TheCommissionShouldRequireGreaterTransparencyInCableCARDBillingThanItsCurrentRulesPropose

Theproposedrulesdonotgonearlyfarenoughinaddressingthelong‐

standingcross‐subsidization8andpricingissuesthathavekeptCableCARDdevices

fromachievingafullermeasureofsuccessinthemarketplace.Thesepracticeserect

barrierstoentry,harmconsumers,9andviolatethecleardirectivesofthestatute.

Indeed,ascommentersobservedinNovember:

8Forexample,RCNCable’spricelistincludesa“digitalconverter”aspartofthe$44.99“SignatureDigitalCable”package.SeeRCN,http://www.rcn.com/dc‐metro/digital‐cable‐tv/services‐and‐pricing(visitedJune11,2010).Thepackagecomeswith“45HDchannels.”Elsewhere,theRCNwebsiteliststhemonthlyrentalfeeforanHDconverterboxas$9.95permonth.RCN,http://www.rcn.com/dc‐metro/digital‐cable‐tv/equipment(visitedJune11,2010).RCN’ssitedoesnotindicatewhetheracustomerwhodoesnotrentanHDconverterboxfromtheMVPDcanget“SignatureDigitalCable”for$35.04permonth—i.e.,thecostofthevideoserviceminustheconverterboxfee.SavvyconsumerswhouseCableCARD‐enabledequipmentratherthanMVPD‐suppliedset‐topboxesmaybeabletonegotiatelowermonthlyrates.See,e.g.,MegMarco,“AskingComcasttoLowerYourMonthlyBillResultsinComcastLoweringYourMonthlyBill,”THECONSUMERIST,June22,2009,http://consumerist.com/2009/06/asking‐comcast‐to‐lower‐your‐bill‐results‐in‐comcast‐lowering‐your‐bill.html.However,thisinformationisusuallynotpublic.9TheaveragelifeofaTiVoDVRisfiveyears.SeeTiVoForm10‐Q,filedDecember9,2009,availableathttp://investor.tivo.com/phoenix.zhtml?c=106292&p=irol‐sec

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TheFCC’scurrentrulesallowcross‐subsidizationofvideodevicecoststhroughservicecharges,andthuslimittheabilityofthirdpartiestocompete….Section629statesthat“equipmentusedbyconsumerstoaccessmultichannelvideoprogrammingandotherservicesofferedovermultichannelvideoprogrammingsystems”maybeofferedtoconsumersbyMVPDs,butthatanychargesforsuchequipmentmustbe“separatelystatedandnotsubsidizedbychargesforanysuchservice.”However,contrarytothecleardirectiveofCongress,theFCChasadoptedrulesthatexpresslyallowsuchsubsidization.10

TheCommissionhaschosentointerpretaprovisionaboutaccountingpractices,

Section623(a)(7)(A),asnegatingSection629’sprohibitiononcross‐subsidization.11

TheCommissionhasnotproposedanyrulestoremedytheseunlawful,unfair,and

anticompetitivepractices,andhasneglectedtheNationalBroadbandPlan’s

recommendationthattheCommissionensurethatthereareequivalentand

(showingthatTiVorecognizesproductlifetimesubscriptionsover60months).AnormalpriceforaTiVoDVRisabout$300,whichtranslatesto$5permonth.Cableoperatorsofferset‐topboxrentalsatpricesinthe$4to$15dollarrange,withthelower‐endboxesgenerallylesscapablethantheconsumer‐owneddeviceswithamortizedcostsinthesamerange.Forexample,RCNCableoffersadigitalconverterfor$3.95amonth(foronedevice,withadditionaldevices$6.95permonth).ButtheirHDDVRcosts$14.95permonthtorent,whichamountsto$897over5years.SeeRCN,http://www.rcn.com/dc‐metro/digital‐cable‐tv/equipment(visitedJune11,2010).Bycontrast,onJune11,2010,aTiVoHDDVRwasavailableforpurchaseonBestBuy.comfor$299.99–one‐thirdthepriceofrentingasimilarboxforfiveyears.10PetitionforRulemakingofPublicKnowledge,FreePress,MediaAccessProject,ConsumersUnion,CCTVCenterforMedia&Democracy,andtheOpenTechnologyInitiativeofNewAmericaFoundation,filedDec.18,2009,at26‐27.11TheCommissionhasincorrectlyinterpretedSection623(a)(7)(A)oftheCableAct,47U.S.C.§543(a)(7)(A),asallowingsomekindsofcross‐subsidizationandbelow‐pricemarketing.See47C.F.R.§76.923(j)(“Acableoperatormayofferequipmentorinstallationatchargesbelow[cost],aslongasthoseofferingsarereasonableinscopeinrelationtotheoperator’soverallofferingsintheEquipmentBasketandnotunreasonablydiscriminatory.”).However,thelegislativehistoryofSection623indicatesthatthissectionwasaimedexplicitlyatpromotinga“broadband,two‐waytelecommunicationsinfrastructure,”H.R.Rep.No.104‐458,at167(1996)(Conf.Rep.),andthusshouldnotbereadinconflictwithSection629.However,oneoftheFCC’sruleimplementingSection629,47C.F.R.§76.1206,defersto47C.F.R.§76.923,improperlyallowingSection623tonullifySection629.

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transparentpricesforCableCARD‐equippeddevicesasforcable‐suppliedset‐top

boxes.

TheCommissionmustensurethatnoeconomicbarriers,whetherexplicitor

implicit,standinthewayofthesuccessofCableCARD.Suchbarriersinhibitthe

developmentofacompetitivemarketplace,andkeeptheCommissionfromfulfilling

itsstatutoryduty.TheNationalBroadbandPlanrecommendedthattheCommission

“[e]stablishtransparentpricingforCableCARDsandoperator‐leasedset‐top

boxes.”12TocarryouttheadviceortheBroadbandPlanandfulfillSection629,in

additiontorequiringthatcableoperatorsseparateoutCableCARDrental‐feesfrom

set‐topboxrentalfeesforcustomerswholeaseanon‐integratedset‐topbox,the

Commissionmustrequirethatcableoperators(1)disclosethepriceoftheleased

boxalongsidethemonthlyrentalfee,13(2)disclosetocustomersoneachbillhow

muchtheyhavepaidinrentalfeesforthatboxtodate,and(3)expresslyinform

customersthattheyhavetheoptionofpurchasingacompetitivedeviceatretail.

Additionally,theFCCmustensurethatnoportionofanMVPD’sservicefeesgoesto

coverequipmentcosts—forexample,byrequiringthatdevicerentalfeescoverall

first‐partydeviceequipmentandsupportcostsincurredbytheMVPD.

Thesesimplerulescouldhavebroadimplications.Consumerscannotmake

rationaleconomicchoicesiftheydonothavethedatanecessarytodosobefore

12Planat52.13CableoperatorsshouldhavetheoptionofdisclosingeithertheMSRPoftheexactSKUthecustomerisrenting,orthewholesalepricethecableoperatorpaidforthedevice.

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them.Totheextentthat,accordingtosomeMVPDs,14consumers“prefer”tolease

ratherthanpurchasevideodevices,itislikelythatthispreferencewouldchange

withsuchinformationinhand.ThestoryofEsterStrogen,whopaidthousandsof

dollarsovertheyearstorentherblackrotarytelephone,iswell‐known.15Herstory

isoutrageousbecauseitcametolightinatimewhenacompetitiveretailmarketin

telephoneequipmentwaswell‐established.HadMrs.Strogenbeenpresentedwitha

runningtallyofherrentalfeesovertheyears,shemayhaverealizeditwasinher

bestintereststosimplypurchaseaphone.Similarly,ifcustomersarepresenteddata

onhowmuchtheyspendtorentdevicesfromthecablecompany,theymaychoose

topurchasedevicesinstead—orcablecompaniesmaystartofferinglowerfeesor

rent‐to‐ownoptions.

III. CableCARDsShouldNotRequireProfessionalInstallation

OneofthebiggestbarrierspreventingCableCARDdevicesfromtakinghold

inthemarketistherequirementimposedbymanycableoperatorsthatacable

technicianvisitthecustomer’shousetoinstalleachCableCARDdevice.Notonly

doesthecustomerhavetoarrangeavisitandwaitathomeforthetechnician.She

oftenmustpaythecableoperatortocarryoutitslegalobligationofsupportingnon‐

integrateddevices.

Thisisunfair,andthwartsthedevelopmentofacompetitivemarketby

makingretaildevicesmoredifficulttosetup.Italsomakesnosensetechnologically.14E.g.,CommentsofTimeWarnerCable–NBPPublicNotice#27,GNDocketNo.09‐51,filedDec.21,2009,at5(“WhilethesignificantmajorityofTWC’ssubscribersleaseset‐topboxestoday,thatresultsfromthemanyadvantagesoftheleasemodelratherthananypreferenceforthatmodelonTWC’spart.”).15WomanPaidThousandstoRentRotaryPhone,USATODAY,Sep.14,2006,http://www.usatoday.com/news/offbeat/2006‐09‐14‐phone_x.htm.

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AnyonewhocanuseanATM,orplugaUSBdriveintoalaptopcomputer,shouldbe

abletoinstallaCableCARD.CableCARDsarenothingmorethanasmallpieceof

electronicsthatslidesintoaslot.Indeed,manyofthesamecableoperatorswho

requireaprofessionalinstallationallowcustomerstoinstallandsetuptheirown

cablebroadbandmodems—amoresophisticatedandexpensivepieceoftechnology.

Forexample,aComcastcustomersupportwebpagecurrentlysaysthat“Atthistime,

professionalinstallation[ofaCableCARD]byaComcasttechnicianisrequired.”16

ButComcast(alongwithmostothercablebroadbandproviders)allowsacustomer

toinstallherowncablemodempurchasedatretail.17Nocableoperatorwhohas

compliedwiththeCommission’sexistingrulesandiscommittedtosupporting

CableCARDs,asthelawrequires,isjustifiedinrequiringaprofessionalinstallation

foraCableCARD.SucharequirementfliesinthefaceoftheveryreasonCableCARD

exists:toallowacustomertopurchaseadeviceatretailandthenuseitwhenshe

getshome.Customersshouldnothavetopayforcableoperator’sfailuretofollow

thelaw.Therefore,theCommissionshouldatminimumenactarulestatingthata

cableoperatorwhocontinuestorequireaprofessionalinstallationforaCableCARD

maynotchargeeitherfortheinstallationorthevisit.18

16ComcastCustomerCentral,http://customer.comcast.com/(S(jpyel145o0gn5555bbdhwajx))/Pages/FAQViewer.aspx?Guid=cb9a7fbf‐e86a‐45ef‐b630‐2f747075d847(visitedJune7,2010).17Comcastevenmaintainsalistofcompatibleequipment.Comcast,CableDevices,http://mydeviceinfo.comcast.net.18Ifacustomerrequestsaprofessionalinstallation,thecableoperatormaychargeforatmostonevisit,butnothingfortheinstallationitself.

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IV. MultistreamCableCARDsShouldBeStandard

Manystandardcableoperator‐suppliedset‐topboxestodaycantune

multiplestreamsofprogrammingononedevice.AnotherbarriertoCableCARD’s

successhasbeenthedifficultyinconfiguringmanyCableCARD‐equippeddevicesto

dothis.SinglestreamCableCARDsdonotofferthisability,andthusadevicewith

onlyonesinglestreamCableCARDcanneverbefunctionallyequivalenttoacable‐

suppliedmultistreamdevice.UnlesstheCommissionrequiresthatcableoperators

providetheirCableCARDcustomerswithmultistreamcapabilities,itwillbenotbe

fulfillingitsstatutoryresponsibilities,andwillfallshortoftheNationalBroadband

Plan’srecommendationthattheCommissionmakesurethatretaildeviceshave

“equalaccesstolinearchannels.”19Acompetitivemarketrequiresthatthird‐party

deviceshaveaccesstothecompleterangeoffeaturesthatcable‐supplieddevices

have.Thus,theCommissionmustgofurtherthanmerelyrequiringthatcable

operators“offer”multistreamCableCARDs.20Multistreamcardsshouldbethe

default,andsinglestreamcardsshouldbeprovidedonlyifnecessary.Ingeneral,a

cableoperatorshouldchargethesamerentalfeeforamultistreamCableCARDas

forasinglestreamcard.IftherentalfeeforamultistreamCableCARDismorethan

thatforasinglestreamcard,thisdifferencemustbeduetoactualequipment

costs—andinnocaseshoulditcostmoretoleaseasinglemultistreamcardthan

multiplesinglestreamcards.21

19Planat52.20FNPRM,¶17.21Additionally,someCableCARDdevicescanusemultiplesinglestreamcardstogivethemmultistreamcapability.Theleasefeesformultiplesinglestreamcards

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V. AnyCableCARDDeviceThatDoesNotHarmtheNetworkShouldBeCertified

Devicecertificationisasignificantbarriertocompanieswhomaywishto

produceCableCARDdevices.Thus,theCommissionseekscommentonstreamlining

CableCARDdevicecertification.Itproposestogenerallylimitdevicecertificationto

thestandardsoftheCableLabs“Uni‐DirectionalReceivingDevice:Conformance

Checklist:PICSProforma.”Thisisagoodidea,andwillmakesurethatcertification

isatechnicalmatter,andnotameansforthecertificationbodytoexertinfluence

overtheentirehomemediaecosystem.Toclarifythislatterpoint,theCommission

shouldstatethatcertificationshouldbeguidedbyasimpleprinciple:any

functioningdevicethatdoesnotharmthenetworkshouldbeapproved.

VI. Two­WayCommunicationBetweenDevicesRemainsImportant,ButtheCommissionShouldAllowInterfacesOtherthanIEEE1394

TheCommissioncanlowerthecostofnon‐integrated,commonrelianceset‐

topboxesifitliftstherequirementthattheseboxessupportIEEE1394.22While

promotinginteroperabilitybetweendevicesintheconsumer’shomeremainsinthe

publicinterest,modern,IP‐enabledinterfacesareabetterroutetothatgoal.23By

droppingtheIEEE1394requirement,theCommissioncanhaveitscakeandeatit

too;loweringthecostofdevicesintheshorttermwithoutsabotagingthe

emergenceofacompetitiveretailmarketplaceforinteroperabledevices.

installedinasingledeviceshouldnotexceedtheleasefeeforasinglemultistreamcard.22FNPRM¶19.23Ingeneral,commenterspreferthattheCommissionpickastandardratherthanprovidearangeofoptionsthatmayleadtoincompatibilitiesamongdevices.However,thenon‐1394interfacesproposedbytheCommissionarewidely‐enoughdeployedthat,inthecircumstances,providingseveralchoicesisnotinappropriate.

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However,theCommissionhasstatedthatoneofthefunctionsofthebi‐

directionalinterfacemightbetodelivervideo.24Commenterssupportthat

requirement.Butwiththatinmind,theCommissionshouldclarifythatonly

interfacesthatoffersufficientbandwidthtostreamHDvideomaybeused.While

evenolderspecificationslike802.11gunderidealconditionsaresuitablefor

streamingHDvideo,spectrumcongestionandpropagationissuescanreduceWiFi

throughput.Therefore,theCommissionshouldspecifythatonlyadual‐band(2.4

GHzand5GHz)802.11n(orlater)WiFiinterfacemeetsitsrequirements.By

requiringdual‐bandsupport,theCommissionwillensurethatlegacydevicesdonot

degradetheperformanceofstreamingvideo.25

Additionally,theCommissionshouldconsiderwhetheritshouldrequirethat

anyinterfacebecapableofIPcommunication.Ithasalreadydeterminedthat

enablingIPconnectivityamonghomemediadevicesisinthepublicinterest.The

newinterfacestheCommissionspecifies,EthernetandWiFi,areIPtechnologies.26

ButuseofUSB3.0willnotprovideIP“outofthebox,”withoutrequiringadditional

softwaresupport.Topromotestandardization,theCommissionshouldrequirethat

anyinterfacebecapableoftwo‐wayIPcommunication.

24FNPRM¶21.25Ifan802.11gdeviceisoperatingonthesamenetworkandfrequencyasan802.11ndevice,the802.11ndevicefallsbackto802.11goperation.Dual‐bandWiFinetworksallowfor802.11ndevicestooperateontherelativelylegacy‐free5GHzband.26IEEE1394supportsIP,amongotherprotocols,andforpresentpurposesisan“IPinterface.”

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VII. TheCommissionShouldRequireCableOperatorsToAcceptaBroadbandReturnPathtoEnableTwo­WayFunctionalityonCableCARDDevices

TheCommissionrecognizesthatthird‐partyvideodevicesusingCableCARDs

mustbeabletosignalupstreamaseasilyasMVPD‐suppliedequipment.27Without

thiscapability,third‐partydeviceshavenoaccesstoon‐demandandinteractive

content.Butperhapsmorecritically,withthedevelopmentofswitcheddigital

channels(whichareonlysentalongthewirewhenacustomerwantstowatch

them),wholechannelsofprogrammingwouldbeunavailabletoCableCARD

customerswithouttwo‐waycommunicationcapabilitybetweendevicesandthe

cableheadend.Thelackofastandardmethodforupstreamcommunication,

therefore,isthelargesttechnologicalbarrierpreventingCableCARDdevicesfrom

achievingfeatureparitywithcable‐supplieddevices.

Asitstands,aconsumerusingatypicalCableCARDdevicehasnouniform

waytotelltheheadendtobeginsendingachanneloranon‐demandprogram.The

Commissionhasaskedforcommentontwoapproachestoremedythisproblemand

carryouttheNationalBroadbandPlan’srecommendationthatthird‐partydevices

shouldhave“equalaccesstolinearchannels”:The“tuningadapter”approach,and

theout‐of‐band‐signalingapproach.Thetuningadapterapproachhasbeentried,

anditisnotsatisfactory.Asdeployed,thetuningadapteramountstonothingless

thanaset‐topboxinandofitself.28TheverypurposeofSection629istoprevent

27FNPRM¶14.28LetterfromMattZinn,SeniorVicePresident,TiVo,toMarleneH.Dortch,Secretary,FederalCommunicationsCommissionat2,CSDocket97‐80(Feb.17,2010)(statingthatthetuningadapterisa“modifiedcable‐suppliedset‐topbox”).IftheCommissiondoeschooseatuningadapterapproach,itshouldensurethatit

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consumersfromhavingtorelyoncable‐suppliedequipmentinordertoaccesscable

programming.Itwouldcontravenethestatute’sintentiftheCommissionnow

requiredcustomerstouseacable‐suppliedboxtoaccesscertaintypesof

programming.

Thetuningadapterapproachwouldrequirethatcableoperatorssupplyand

supportanewclassofdevicesinconsumers’homes,inadditiontoCableCARD.

Deploymentissuescouldhamperthesuccessoftuningadapters.Inadditionto

needingtohaveanadequatesupplyoftheseadaptersonhandinadditionto

CableCARDS,theadaptersaremorecomplexthanaCableCARD,andthisadded

complexitymightmakeself‐installationmoredifficult.TheCommissionwouldneed

toestablishrulesgoverningthesaleorleaseoftuningadapters,andthecostof

leasingatuningadapterplusaCableCARDmightreducetheattractivenessofretail

third‐partydevices,whichoftencompetewithMVPD‐suppliedofferingsbybeing

cheaperinthelongrunthanaggregateequipmentfees.Additionally,thisdocketis

alreadyrepletewithreportsfromcustomerswhohavenotbeenabletogettheir

tuningadapterstofunctionproperly.29Therefore,commenterssupportTiVo’sout‐

of‐bandcommunicationapproach.

Theout‐of‐bandapproachisfarbetter.Thisrequiresthataconsumerattach

aCableCARDdevicetoabroadbandconnection,insteadofallowingforupstream

signalingonthecabletelevisionsystemitself.(Itisessentialthatsucha

doesnothavetheseobviousflaws.Forexample,theadaptermustbenolargerthanatypicalUSBdongle,anditmustnotrequireitsownindependentpowersupply.29See,e.g.,CommentofGregFriedman,CSDocket97‐80,filedApr.27,2010(“Ihavehadmanyissueswithcablecardandtuningadaptersnotperformingaswellasmysetopbox,includingmysettopboxwithcablecard.”).

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requirementwouldworkonanybroadbandconnection—i.e.,notonlyoncable

broadband.)Itwouldonlyrequireminimalinfrastructurechangesbycable

operators,toreceivethebroadbandsignals,andtoallowcommunicationbetween

thebroadbandsignalingequipmentandtheheadend.Especiallygiventhat

broadband‐capableCableCARDdevicesarealreadyavailable,theout‐of‐band

communicationapproachismorelikelytoachievetheCommission’sgoalsthanthe

tuningadapterapproach.Theout‐of‐bandapproachissimplerandwouldgenerate

fewerdeploymentandsupportissues.However,inadditiontoestablishing

standardsonhowtheout‐of‐bandapproachwillfunction,theCommissionshould

seekdataastohowmanybuyersofthird‐partyCableCARDdevicesareableto

attachatelevisionset‐topboxtobroadband,ifthisisrequiredtoallowtwo‐way

communication.

VIII. CommonRelianceRemainsanEssentialPrincipletoEnsureProperCableCARDSupport

Thecommonrelianceprinciplehasreceivedinsufficientsupportinpast

Commissiondecisions,butthatprincipleshouldnotbeabandoned.Itisakeyto

removingacableoperator’sabilityandincentivetodiscriminateagainstCableCARD

users,byensuringthatcableoperatorsuseCableCARDfortheset‐topboxesthey

leasetocustomers.ThismakessurethatCableCARDisnotatechnologythatonly

theircompetitorsuse,andallowsCableCARDtechnologytoreceivefirstclass

supportandoperatewithfewertechnicalglitches.

Commonrelianceneverbecameareality.TheCommission’s“integration

ban”waslongdelayed,andwhilecableoperatorsfollowedittosomeextent,itwas

weakenedbytheexcessivegrantofwaiversto“lowcost,noncompliant”devicesthat

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didnotuseCableCARDtechnology.30Whileintendedtosavecustomersmoney,

thesewaiverssimplyensuredthatcompliantdevicescouldnotachievethe

economiesofscaleneededtobringtheircostsdown.Furthermore,anyshort‐term

savings(assumingtheyevenwerepassedalongtocustomers)weremorethan

offsetbytheeffectthesewaivershad:stuntingthemarketfornavigationdevices,

thusensuringthatmostconsumerswouldcontinuetopayarentalfeefortheirset‐

topboxes,whichtheywouldnotbeabletotakewiththemfromonecablesystemto

another.

Ifthegoalofthisproceedingisto“fixCableCARD,”theCommissionshould

notdropthecommonreliancerequirementbyamendingtherulestoallowcable

operatorstodeployHD‐capable,integratedset‐topboxes.Itisnotenoughforthe

CommissiontomerelysaythatcableoperatorsmustsupportCableCARD,whenit

couldadoptrulesthatmakeitnearcertainthattheywould.Commonreliance,if

implementedandnotwaivedawayforallcomers,coulddothat.

However,theCommissionshouldnotbeblindtotherealitiesofthecable

marketplace.Itisprobablethatcompliantdevicescouldachievethenecessary

economiesofscaletobringtheircostsdowniftheyweredeployedjustbythe

largestMSOs.31Forthisreason,iftheCommissiondoeselecttoeliminatecommon

30PetitionforReconsiderationofPublicKnowledge,FreePress,MediaAccessProject,NewAmericaFoundation,OpenTechnologyInstitute,andU.S.PIRG,CSR‐7902‐Z,filedJune29,2009,availableathttp://www.publicknowledge.org/pdf/pk‐etal‐evolution‐recon‐20090629.pdf(askingtheCommissiontoreconsidertheordereliminatingtheprincipleofcommonreliancefor“lowcostlimitedcapability”devices).31EvenconsideringthatthesecondandthirdlargestMVPDsarenotcable,thetopfivecableoperatorscontrolmorethanhalfoftheentireMVPDmarketplace.Annual

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reliancerequirementsforsomeset‐topboxes,itshouldlimittheapplicabilityofany

waiverstosmallercablesystemswithanactivatedcapacityof522MHzorless.Ifit

doesthis,however,theCommissionshouldestablishastreamlinedcomplaintand

enforcementmechanismtoensurethatthesesmallercableoperatorsproperly

supportCableCARD.Suchacomplaintandenforcementmechanismwouldnotbe

overlyburdensomefortheCommissiontoimplementbecauseoftherelativelysmall

customerbaseofthesmallercableoperators.

CONCLUSION

TheCommissionhasmovedtheballforwardonvideodevicecompetition

significantly.IfitcraftsrulesthatensureproperCableCARDsupport,itcanachieve

measurableresultsinthenearterm.

RespectfullySubmitted,PublicKnowledgeMediaAccessProjectNewAmericaFoundation

By:/s/JohnBergmayer/s/AnjaliBhat1818NSt.NW,Suite410WashingtonDC20036(202)861‐0020PublicKnowledge/s/MatthewF.Wood1625KSt.NW,Suite1000WashingtonDC20006(202)232‐4300MediaAccessProjectAssessmentoftheStatusofCompetitionintheMarketfortheDeliveryofVideoProgramming,ThirteenAnnualReport,24FCCRcd.542,687(2009).

23

/s/BenjaminLennett1899LSt,Suite400WashingtonDC20036(202)986‐2700NewAmericaFoundation

June14,2010