The 9th annual Hollywood Creative Forum (HCF) concluded this week in Beverly Hills, and while every year brings intriguing…
Senators Edward Markey (D-MA) and Richard Blumenthal (D-CT) recently repeated a number of claimsabout the state of the marketplace for video devices and the presumed effects of last year’s STELA Reauthorization Act of 2014 (STELAR) on retail set-top boxes. Regrettably, however, their claims misread the STELAR statute, the impact of changes that were supported on a bipartisan basis, and the state of the video device marketplace.
It’s simply not accurate to say that “cable companies will no longer be required to make their services compatible with outside set-top boxes, like TiVo for example, bought directly by consumers in the retail marketplace,” thereby “doom[ing] consumers to being captive to cable company rental fees forever.” In fact, the STELAR provision at issue – the sunset of the FCC much maligned “integration ban” rule — does not affect the market for retail devices. It merely eliminates an FCC-compelled obligation that required cable operators – and cable operators alone – to include an unnecessary piece of hardware (i.e., a CableCARD) in the set-top boxes they provide to their customers. For years this mandate has forced cable customers with leased set-top boxes to bear added costs and higher energy use while offering no consumer benefit.
Importantly, especially for companies like TiVo that rely on CableCARDs, ending the integration ban does not mean the end of CableCARDs or cable’s support of the retail video device marketplace. As former Ranking Member Waxman observed on the floor of the House in the STELAR debate “[r]emoving the integration ban from the FCC’s rule books does not eliminate the separable security requirement that ensures competitive access to cable companies’ own decryption technology for set top boxes.” We couldn’t have said it better ourselves.
“Ending the integration ban does not mean the end of CableCARDs.”
And TiVo, the leader in retail CableCARD devices, made exactly the same point in a January 4, 2015 blog post:
“We expect CableCARDs to be supplied and supported by cable operators for many years after cable operators are no longer required to use them in their own set top boxes for several reasons. This requirement has been in effect since 2000 and was not impacted by the recent [i.e. STELAR] legislation. Cable operators provided CableCARDs to retail devices to comply with the separable security requirement before operators were required to use CableCARDs in their own boxes in 2007 and we expect that they will continue to provide CableCARDs to comply with this requirement after they no longer have to use CableCARDs in their own boxes in 2016.”
Thus, when the integration ban expires later this year, consumers will not only continue to have traditional retail choices, but those options will be joined by an ever growing menu of retail devices that offer consumers new ways to consume entertainment content over the Internet through apps and video libraries without the need for a cable box.
Cable is working, as it must, to address consumer pain points in service and, we are taking the lead in providing device alternatives to consumers. In future blog posts, we’ll highlight what the cable industry is doing to provide consumers more options for viewing TV content on retail devices. But rest assured that consumers who rely on TiVos and other retail CableCARD devices will continue to be part of the mix.