Boxee and the CEA Join Forces Against the Cable Companies

Mr. Boxee Goes to Washington

Under current regulations, cable companies are generally not allowed to encrypt their basic, analog channels. This allows the tuners built into TVs and devices such as the recently launched Boxee Live TV to receive the channels without a settop box. Cable companies can request a waiver from the FCC to switch to a fully digital and encrypted system, but to date, the regulatory agency has been reluctant to grant such requests. However, the times are changing and the cable companies are spending big bucks lobbying the FCC to change the regulations to allow all cable companies to switch to fully digital and encrypted systems, a move that will effectively lock out any off-the-shelf consumer electronics with traditional tuners. Cable subscribers will instead be forced to use a cable company provided settop box or CableCard. 

Boxee has decided to get involved and throw their support in with the Consumer Electronics Agency, which has been vigorously opposing any change to the current regulations. Boxee recently gave a presentation to the Chairman of the FCC, demoing the Boxee Live TV and attempting to explain the negative impact on innovation and consumer choice that a change to the regulations would have. Like the CEA, Boxee isn’t arguing that the cable companies do not have valid reasons to want to switch to digital systems, but that the decision should not be rushed and should instead be put off until a new system, such as AllVid, the FCC’s proposed CableCard successor, can be established to continue to offer consumers a choice on what devices to use with their subscription service.

Cable companies have asked the FCC for waivers to these restrictions, arguing that encrypted channels would reduce piracy and that encrypted cable connections can be remotely serviced, eliminating the need for many service visits. The FCC is currently hearing all sides of the issue as it contemplates whether to do away with the restrictions and allow all cable companies to encrypt basic cable. Boxee has filed multiple letters with the commission and met with its staff last week.

GigaOm

  • “attempting to explain the

    “attempting to explain the negative impact on innovation and consumer choice that a change to the regulations would have.”

    What a load of crap.  There would be no negative impact on innovation or consumer choice if the rules were changed.  Actually, changing the rules would spur more innovation than leaving the rules alone.  Anyone can look around and see how few CableCARD products exist.  IMO, Boxee (and other companies on that side of the issue) are just scared to spend a little money making their products work with CableCARD.

     

    • In the current ecosystem

      In the current ecosystem there’s no need for them to “spend a little money making their products work with CableCARD”, changing the rules to require CableCARD for will hamper innovation because it’s not “a little money” to get certified effectively cutting out small companies like Boxee. It should be obvious that MSOs are threatened by services like Boxee who’s business model is about cutting them out. While Boxee doesn’t have the market share to really threaten them yet, it doesn’t take much analysis to see this (at least in part) as a preemptive strategy to make sure that doesn’t happen.

      • Getting CableLabs certified

        Getting CableLabs certified only costs a lot of money if you don’t have a lot of money to spend.  But if you’ve got the money to spend, ClearQAM is just the cheap way out.  I don’t know about Boxee, but I’m pretty sure Panasonic, LG, Samsung, and other similar companies have the money.

        • Is it your point that you

          Is it your point that you need to be a big, rich company to play in this space then? If so, doesn’t that by definition limit competition and innovation?

          • No, it’s my point that big,

            No, it’s my point that big, rich companies that can afford to play in this space act like they are small companies that can’t.  As a result, consumers have very few CableCARD products to choose from.

            I don’t expect small companies to be able to afford to launch CableLabs certified products on day 1, but I do expect them to introduce products with more capabilities as the business grows.  Boxee’s current position is a pretty good indicator of what they plan to do with the company as it grows….they plan to shun CableCARD just like the majority of everyone else.

          • richard1980 wrote:No, it’s my

            [quote=richard1980]

            No, it’s my point that big, rich companies that can afford to play in this space act like they are small companies that can’t.  As a result, consumers have very few CableCARD products to choose from.

            [/quote]

            It’s kind of silly to expect TVs to support CableCARD and that consumers will want to pay for the feature when the majority will not use it. Some OEMs tried it already, and no one bought them. As it turned out, people who liked pay TV enough to use a DCT weren’t going to stick it in the display when there are much smarter places to implement the technology.

            IMO there are two big reasons why we don’t see more retail DCT solutions:

            1) devices are expensive up front, and have fewer features than MSO STB/DVRs

            2) certification process is long, invasive and expensive

            [quote=richard1980]

            I don’t expect small companies to be able to afford to launch CableLabs certified products on day 1, but I do expect them to introduce products with more capabilities as the business grows.  Boxee’s current position is a pretty good indicator of what they plan to do with the company as it grows….they plan to shun CableCARD just like the majority of everyone else.

            [/quote]

            And why shouldn’t they? According the FCC CableCARD a failed tech, the problem is that it’s the only thing we’ve got and for a limited subset of consumers who don’t care about on demand it’s a great solution. Their business model is designed around making it possible to scale back or eliminate their TV bill, adding features like that would move it in the wrong direction. Boxee needs live linear TV for sports, doubling the price of a $180 box to add DCT support just for that feature isn’t smart.

          • babgvant wrote:

            It’s kind of

            [quote=babgvant]

            It’s kind of silly to expect TVs to support CableCARD and that consumers will want to pay for the feature when the majority will not use it. Some OEMs tried it already, and no one bought them.

            [/quote]

            I would disagree that most would not use it if there was more of an effort to educate consumers about what their options are.  Unfortunately, most consumers have no idea what a CableCARD is, and they aren’t aware that they don’t have to rent a cable box from the cable company.  No product will ever be successful unless people know it exists and understand it.

            I don’t think it’s really fair to let the past performance of retail CableCARD devices influence the decision.  Nobody bought it before because nobody knew about it and cable companies were busy pushing their own hardware instead.  It’s really hard for people to buy something they don’t know about.

            Now let’s say a company like Apple comes along and releases their own set-top-box.  Assuming they didn’t try to follow TiVo’s business model, there’s a real chance that cable company STBs would become the minority.  And Apple’s entry into the CableCARD market would spark other companies to do the same thing.

            [quote=babgvant]

            1) devices are expensive up front, and have fewer features than MSO STB/DVRs

            [/quote]

            I agree completely with the first half of your statement.  And it’s the lack of competition within the market that keeps them expensive.  Cable companies are allowed to charge outrageous prices for their STBs (the real cost of a cable box is at most 12 times the monthly lease fee (47 C.F.R. § 76.923, paragraphs F and G) yet the cost to consumers is much higher because leasing fees continue for an indefinite period of time), and what few alternative products are available (read:  TiVo) are priced to compete with cable boxes over a longer period of time than they should be.  There is effectively no competition in the retail space.

            As for the features, those are really up to the manufacturer.  I’m sure the guys from Ceton would disagree that they can’t pack in more features than a typical cable box.  Maybe they can’t get consumers access to on-demand content from the cable company, but they can certainly make up for it in other ways.

            [quote=babgvant]

            And why shouldn’t they? According the FCC CableCARD a failed tech, the problem is that it’s the only thing we’ve got and for a limited subset of consumers who don’t care about on demand it’s a great solution. Their business model is designed around making it possible to scale back or eliminate their TV bill, adding features like that would move it in the wrong direction. Boxee needs live linear TV for sports, doubling the price of a $180 box to add DCT support just for that feature isn’t smart.

            [/quote]

            And Boxee will be out of business soon if they continue with that business model.  The “cut the cord” business model is a joke in the US, and it will ultimately lead to Boxee’s failure unless they change their model.  I mean really, look at the Boxee Box sales figures.  It’s been on the market for 15 months and is sold in 34 countries.  As of about a month ago, only about 200,000 Boxee Boxes have been sold worldwide.  Compare that to the 100,000,000+ households in the US (83% of the population) that subscribe to a pay TV service.

            You want to talk about moving in the wrong direction?  Boxee is already doing that.  They are focusing on a market that is so tiny, it’s insignificant, and at some point, it will force Boxee to either go out of business or change their model.

          • richard1980 wrote:I would

            [quote=richard1980]

            I would disagree that most would not use it if there was more of an effort to educate consumers about what their options are.  Unfortunately, most consumers have no idea what a CableCARD is, and they aren’t aware that they don’t have to rent a cable box from the cable company.  No product will ever be successful unless people know it exists and understand it.

            I don’t think it’s really fair to let the past performance of retail CableCARD devices influence the decision.  Nobody bought it before because nobody knew about it and cable companies were busy pushing their own hardware instead.  It’s really hard for people to buy something they don’t know about.

            [/quote]

            CableCARD’s failure in retail isn’t a marketing problem. The feature adds significant cost to displays, is useless to satellite users, and better implemented in other devices (like a DVR). It’s obvious why it failed in displays; it doesn’t make any sense there.

            There are people who just want to plug the TV into the wall and have it work. While I don’t include myself in this group it’s not right to dismiss them or the value they receive from being able to do that. My concern in this, and many other policy decisions, is that some in our society only look at one side of the equation.

            [quote=richard1980]

            Now let’s say a company like Apple comes along and releases their own set-top-box.  Assuming they didn’t try to follow TiVo’s business model, there’s a real chance that cable company STBs would become the minority.  And Apple’s entry into the CableCARD market would spark other companies to do the same thing.

            [/quote]

            IIRC Jobs said they wouldn’t play in this market because the model was borked (obviously paraphrasing).

            [quote=richard1980]

            As for the features, those are really up to the manufacturer.  I’m sure the guys from Ceton would disagree that they can’t pack in more features than a typical cable box.  Maybe they can’t get consumers access to on-demand content from the cable company, but they can certainly make up for it in other ways.

            [/quote]

            Because I use a CableCARD device I can’t use On Demand or PPV (easily). For many consumers that’s the point where they lose interest; I’ve had the CableCARD conversation many, many times this is the point where the dream dies.

            Innovative companies can build supplemental features to mitigate this loss, but it doesn’t fundamentally change the fact that I’m paying for a feature that I can’t use. Any CE OEM in the market starts from that point and has to figure out how to sell their device minus a critical feature for most.

            [quote=richard1980]

            And Boxee will be out of business soon if they continue with that business model.  The “cut the cord” business model is a joke in the US, and it will ultimately lead to Boxee’s failure unless they change their model.  I mean really, look at the Boxee Box sales figures.  It’s been on the market for 15 months and is sold in 34 countries.  As of about a month ago, only about 200,000 Boxee Boxes have been sold worldwide.  Compare that to the 100,000,000+ households in the US (83% of the population) that subscribe to a pay TV service.

            You want to talk about moving in the wrong direction?  Boxee is already doing that.  They are focusing on a market that is so tiny, it’s insignificant, and at some point, it will force Boxee to either go out of business or change their model.

            [/quote]

            Boxee is a small company that was unfocused. They don’t need to move a lot of hardware to stay alive, and with the PC client gone they can completely focus on fixing the Boxee Box. I don’t think they are fighting a losing battle. For the vast majority of content types OTT is a better model than cable. We don’t know if they will survive, but I think there is a big enough market for them to (SageTV managed for many years) thrive in this niche as long as the MSO aren’t allowed to hobble them.

          • babgvant wrote:

            CableCARD’s

            [quote=babgvant]

            CableCARD’s failure in retail isn’t a marketing problem. The feature adds significant cost to displays, is useless to satellite users, and better implemented in other devices (like a DVR). It’s obvious why it failed in displays; it doesn’t make any sense there.

            [/quote]

            If it’s not a marketing problem, they why don’t more people know what a CableCARD is?  On the flip side, almost everybody knows what a cable box is.

            And I’m not sure how you can say adding a CableCARD slot adds significant cost to the display, because it really doesn’t.  What adds cost is when someone decides to increase the cost of the TV because it has a CableCARD slot.  In reality, the cost to the manufacturer to include a CableCARD slot is virtually nothing, so the price hike is not really justified.

            [quote=babgvant]

            There are people who just want to plug the TV into the wall and have it work.

            [/quote]

            Which is exactly why we need TVs with CableCARD slots.  It’s ridiculous that I have to buy a TV and then turn around and lease a cable box, buy a TiVo, or build an HTPC/buy an extender in order for that TV to receive the cable programming.

            [quote=babgvant]

            My concern in this, and many other policy decisions, is that some in our society only look at one side of the equation.

            [/quote]

            I would be one of those people.  I’m a consumer, and my position is from a consumer perspective.  And from a consumer perspective, this model we have now is stupid and needs to be changed.

            [quote=babgvant]

            IIRC Jobs said they wouldn’t play in this market because the model was borked (obviously paraphrasing).

            [/quote]

            My point wasn’t so much about Apple getting into the TV market as it was about Apple’s power to influence consumers.

            Here were Steve’s exact words:

            “The problem with innovation in the TV industry is the go to market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us… ask Google in a few months.”

            Steve’s idea of the model is no longer correct now that the FCC changed the bundling rules.  What used to be a “free” set top box in a bundled package now has a price tag.  Of course, even before the rules changed, I never got a free set top box.  Every time I have ever had a set top box, there has been some sort of price associated with it.

            [quote=babgvant]

            Because I use a CableCARD device I can’t use On Demand or PPV (easily). For many consumers that’s the point where they lose interest; I’ve had the CableCARD conversation many, many times this is the point where the dream dies.

            Innovative companies can build supplemental features to mitigate this loss, but it doesn’t fundamentally change the fact that I’m paying for a feature that I can’t use.

            [/quote]

            That’s another one of my complaints with the current model.  I have to pay $6 per month to even get access to digital tiers.  That $6 is to pay for more than just access to the tiers though…it’s also used to cover the cost of the EPG and all the 2-way services such as VOD.  Nevermind the fact that I can’t use any of the features (except the digital access) with my CableCARD tuner.  IMO, this needs to be changed too.  If I don’t have access to this stuff, I shouldn’t have to pay for it.

            [quote=babgvant]

            I think there is a big enough market for them to (SageTV managed for many years) thrive in this niche as long as the MSO aren’t allowed to hobble them.

            [/quote]

            SageTV was on a completely different level from the Boxee Box though.  Your talking about a platform that could act as a DVR and even had extenders.  With that said, I think SageTV would have eventually died out anyway if they would have continued on their non-CableCARD path.  With the introduction of new CableCARD tuners in the past year and a half, the entire HTPC market changed.  Just look at how many people have CableCARD tuners now vs 2 years ago.  The market that only consumes OTA and ClearQAM content was small before and it’s getting smaller each day.  Trying to pursue that market is a bad idea.

          • richard1980 wrote:If it’s not

            [quote=richard1980]

            If it’s not a marketing problem, they why don’t more people know what a CableCARD is?  On the flip side, almost everybody knows what a cable box is.

            [/quote]

            How about “not primarily a marketing problem”? Sure there is an information gap, but in this case it’s lipstick on the pig.

            [quote=richard1980]

            And I’m not sure how you can say adding a CableCARD slot adds significant cost to the display, because it really doesn’t.  What adds cost is when someone decides to increase the cost of the TV because it has a CableCARD slot.  In reality, the cost to the manufacturer to include a CableCARD slot is virtually nothing, so the price hike is not really justified.

            [/quote]

            Eh? Development, DRM licensing, CableCARD certification and HW cost $. I agree that with sufficient volume the cost would go down but it’s not “virtually nothing”.

            [quote=richard1980]

            Which is exactly why we need TVs with CableCARD slots.  It’s ridiculous that I have to buy a TV and then turn around and lease a cable box, buy a TiVo, or build an HTPC/buy an extender in order for that TV to receive the cable programming.

            [/quote]

            That’s a very 1980’s way of looking at it. I don’t want linear TV, many cable subscribers don’t want 100% linear TV either (which is why the crappy MSO DVRs are so popular). Those devices that you don’t want to buy add significant value beyond what is possible on a display + CableCARD; that’s why the market rejected one for the other.

            [quote=richard1980]

            I would be one of those people.  I’m a consumer, and my position is from a consumer perspective.  And from a consumer perspective, this model we have now is stupid and needs to be changed.

            [/quote]

            There’s something we can agree on (of course the why and how probably diverge a bit) 🙂

            [quote=richard1980]

            My point wasn’t so much about Apple getting into the TV market as it was about Apple’s power to influence consumers.

            [/quote]

            They certainly had the power to make markets and influence consumer behavior, but they were also smart enough to enter markets that could be disrupted and leave others alone. While I don’t personally agree with the approach the company takes around choice and flexibility, it’s clear that they were very smart in this way.

            [quote=richard1980]

            That’s another one of my complaints with the current model.  I have to pay $6 per month to even get access to digital tiers.  That $6 is to pay for more than just access to the tiers though…it’s also used to cover the cost of the EPG and all the 2-way services such as VOD.  Nevermind the fact that I can’t use any of the features (except the digital access) with my CableCARD tuner.  IMO, this needs to be changed too.  If I don’t have access to this stuff, I shouldn’t have to pay for it.

            [/quote]

            +1

            [quote=richard1980]

            SageTV was on a completely different level from the Boxee Box though.  Your talking about a platform that could act as a DVR and even had extenders. 

            [/quote]

            The products are different, but the concept is the same. Small players don’t need large volumes to be profitable.

            [quote=richard1980]

            With that said, I think SageTV would have eventually died out anyway if they would have continued on their non-CableCARD path. 

            [/quote]

            While I agree that SageTV would have been more valuable/useful with proper DCT support, I’m not convinced that it was totally wrong for them not to implement it. CableCARD is only useful to specific use cases and very expensive to implement properly. Besides, for many SageTV users CableCARD works just fine 🙂

            [quote=richard1980]

            With the introduction of new CableCARD tuners in the past year and a half, the entire HTPC market changed.  Just look at how many people have CableCARD tuners now vs 2 years ago.  The market that only consumes OTA and ClearQAM content was small before and it’s getting smaller each day.  Trying to pursue that market is a bad idea.

            [/quote]

            ATSC/ClearQAM is a supplemental feature for Boxee, given the amount of OTT content now and where the market is going I’d bet on them (if it was a public company I’d be willing to put $ where my mouth is too). Obviously it will be a LONG time before they, or someone similar, will disrupt the current model, but I will be very surprised if they don’t long term. Linear delivery is an inefficient way to consume content, it’s just a matter of time.

          • babgvant wrote:

            Eh?

            [quote=babgvant]

            Eh? Development, DRM licensing, CableCARD certification and HW cost $. I agree that with sufficient volume the cost would go down but it’s not “virtually nothing”.

            [/quote]

            $1 or $2 per TV (I’m probably overshooting it quite a bit) is virtually nothing.  You act like this stuff is expensive, but really it’s not, especially when you consider the sales volume of TVs.  It’s only expensive if you are a company like Boxee that can’t get anyone to buy your products.  But when you can move millions of TVs each year, the cost of adding a CableCARD slot becomes very insignificant.

            [quote=babgvant]

            That’s a very 1980’s way of looking at it. I don’t want linear TV, many cable subscribers don’t want 100% linear TV either (which is why the crappy MSO DVRs are so popular). Those devices that you don’t want to buy add significant value beyond what is possible on a display + CableCARD; that’s why the market rejected one for the other.

            [/quote]

            If plug and play capabilities and competitive markets are a 1980s way of looking at things, then so be it.  I’ll gladly take that over our current market where there is effectively no competition and cable companies rape consumers with their ridiculous hardware fees.  And MSO equipment is so popular for two reasons.  First, it’s what the MSOs cram down everyone’s throat.  Second, there’s really only one company that has anything that can potentially compete with a cable box…TiVo.  Unfortunately, TiVo’s idea of how to price products pretty much knocks them out of competition.  Perhaps if people could just buy a decently priced cable box or TV with a CableCARD slot off the retail shelf, the MSO equipment wouldn’t be so popular.

            [quote=babgvant]

            Besides, for many SageTV users CableCARD works just fine

            [/quote]

            Yeah, as long as the content is copy-freely.  Throw a copy-once flag in there, and SageTV is useless.

            [quote=babgvant]

            ATSC/ClearQAM is a supplemental feature for Boxee, given the amount of OTT content now and where the market is going I’d bet on them (if it was a public company I’d be willing to put $ where my mouth is too). Obviously it will be a LONG time before they, or someone similar, will disrupt the current model, but I will be very surprised if they don’t long term. Linear delivery is an inefficient way to consume content, it’s just a matter of time.

            [/quote]

            I don’t think Boxee or anyone else has any chance at disrupting the current model.  I see MSOs changing the way they deliver content (they will likely switch to on-demand IP delivery, just as soon as they can figure out how to keep advertising revenue high), and in the meantime Hollywood, Comcast, and Time Warner, etc will keep restricting their content.  And of course the internet providers will continue to complain about bandwidth usage, and I expect bandwidth limitations to get tighter and pricing to get more expensive until the idea of streaming content over the internet is no longer a viable option for consumers.

          • richard1980 wrote:$1 or $2

            [quote=richard1980]

            $1 or $2 per TV (I’m probably overshooting it quite a bit) is virtually nothing.  You act like this stuff is expensive, but really it’s not, especially when you consider the sales volume of TVs.  It’s only expensive if you are a company like Boxee that can’t get anyone to buy your products.  But when you can move millions of TVs each year, the cost of adding a CableCARD slot becomes very insignificant.

            [/quote]

            Do you have anything to back up this assertion?

            [quote=richard1980]

            If plug and play capabilities and competitive markets are a 1980s way of looking at things, then so be it. 

            [/quote]

            Linear TV on a TV is plug and play, but it’s also incredibly limited and not terribly flexible. My children have no concept of channels, when a TV show is on, or really even the idea of “always on TV”; they know only “shows”. Watching commercials is an annoying novelty only experienced when we travel.

            [quote=richard1980]

            I’ll gladly take that over our current market where there is effectively no competition and cable companies rape consumers with their ridiculous hardware fees. 

            [/quote]

            And yet you defend their “right” to do so.

            [quote=richard1980]

            And MSO equipment is so popular for two reasons.  First, it’s what the MSOs cram down everyone’s throat.  Second, there’s really only one company that has anything that can potentially compete with a cable box…TiVo.  Unfortunately, TiVo’s idea of how to price products pretty much knocks them out of competition.  Perhaps if people could just buy a decently priced cable box or TV with a CableCARD slot off the retail shelf, the MSO equipment wouldn’t be so popular.

            [/quote]

            There was a time when you could buy a TV with CableCARD. IIRC, it didn’t sell well enough to last more than one or two years.

            [quote=richard1980]

            Yeah, as long as the content is copy-freely.  Throw a copy-once flag in there, and SageTV is useless.

            [/quote]

            To me copy-once content is pretty much useless.

            [quote=richard1980]

            I don’t think Boxee or anyone else has any chance at disrupting the current model.  I see MSOs changing the way they deliver content (they will likely switch to on-demand IP delivery, just as soon as they can figure out how to keep advertising revenue high), and in the meantime Hollywood, Comcast, and Time Warner, etc will keep restricting their content.  And of course the internet providers will continue to complain about bandwidth usage, and I expect bandwidth limitations to get tighter and pricing to get more expensive until the idea of streaming content over the internet is no longer a viable option for consumers.

            [/quote]

            Everyone is entitled to an opinion.

          • babgvant wrote:

            Do you have

            [quote=babgvant]

            Do you have anything to back up this assertion?

            [/quote]

            My estimate for the cost is based primarily on the cost that cable companies have to pay for CableLabs certified equipment….specifically, CableCARDs themselves and set top boxes that contain the tuners.  47 C.F.R. § 76.923 paragraphs F and G contain the rules and formula for determining the monthly lease fee for all cable company equipment.  Using the formula, it is easy to figure out how much a cable company is actually spending on each device, and comparing the cost of devices with a CableCARD slot to similar devices without a CableCARD slot is a pretty good estimate of how much it costs to add CableCARD functionality to a device.  Based on this data, I estimate that adding CableCARD functionality to a set top box costs the manufacturer just a few dollars (I would put it at less than $5).  This is based on lease fees of $1.99 for a CableCARD, $4.99 for a basic receiver+CableCARD, and $1.99 for a DTA with no CableCARD slot.

            In addition, CableLabs publishes their price list, and every publicly traded TV manufacturer publishes their sales data.  Considering that there are far more TVs sold than cable boxes, I would expect a cost of adding a CableCARD slot to a TV to be far lower than adding it to a cable box, since certification and R&D costs get spread over a larger number of units.

            [quote=babgvant]

            Linear TV on a TV is plug and play, but it’s also incredibly limited and not terribly flexible. My children have no concept of channels, when a TV show is on, or really even the idea of “always on TV”; they know only “shows”. Watching commercials is an annoying novelty only experienced when we travel.

            [/quote]

            I haven’t seen a TV that was strictly linear in several years.  Pretty much all TVs today come with non-linear capabilities.  However, those non-linear capabilities have not replaced the linear system.  An overwhelming majority of consumers still rely on the linear system because the non-linear system is not yet an acceptable substitute.

            [quote=babgvant]

            And yet you defend their “right” to do so.

            [/quote]

            If you think that, then you are misinterpreting my entire position.  My position is based on what I think will introduce more competition into the market and serve the greater good of the consumers.  Leaving things the way they are is not going to introduce competition into the market.  We can already see that today.  Forcing TV manufacturers to implement CableCARD technology would introduce competition into the market, which would then likely lead to even more competition as more companies get into the market.  Just imagine being able to go to your local electronics store and browse shelves of DVRs.  Or just imagine if your TV had a DVR built right into it.  That’s the kind of market we should have today, but because nobody forced the issue, it hasn’t happened.  It’s time to force the issue.  If I had my way, CableCARD slots would be mandatory like ATSC tuners.

            [quote=babgvant]

            There was a time when you could buy a TV with CableCARD. IIRC, it didn’t sell well enough to last more than one or two years.

            [/quote]

            That was due to a combination of poor pricing and poor consumer education.  Not that it’s the consumer’s fault…manufacturers and cable companies are to blame.  When a TV with a CableCARD slot is $1000 more than an identical TV without a CableCARD slot, it’s no wonder people don’t pay the extra $1000.  And when cable companies force their own hardware down consumers’ throats, it’s no wonder that consumers don’t seek retail navigation devices.  Additionally, I think it would be interesting to know how many people have a TV with a CableCARD slot and have no idea what it is.

            [quote=babgvant]

            To me copy-once content is pretty much useless.

            [/quote]

            I don’t know of any consumers that like copy control or DRM.  But it is necessary to keep content creators/owners happy and producing content.

          • richard1980 wrote:My estimate

            [quote=richard1980]

            My estimate for the cost is based primarily on the cost that cable companies have to pay for CableLabs certified equipment….specifically, CableCARDs themselves and set top boxes that contain the tuners.  47 C.F.R. § 76.923 paragraphs F and G contain the rules and formula for determining the monthly lease fee for all cable company equipment.  Using the formula, it is easy to figure out how much a cable company is actually spending on each device, and comparing the cost of devices with a CableCARD slot to similar devices without a CableCARD slot is a pretty good estimate of how much it costs to add CableCARD functionality to a device. 

            Based on this data, I estimate that adding CableCARD functionality to a set top box costs the manufacturer just a few dollars (I would put it at less than $5).  This is based on lease fees of $1.99 for a CableCARD, $4.99 for a basic receiver+CableCARD, and $1.99 for a DTA with no CableCARD slot.

            [/quote]

            [quote=47 C.F.R. § 76.923]

            Monthly Charge = UCE + (HSC × HR) / 12

            Where, HR = average hours repair per year;
            and UCE = average annual unit cost of remote.

            [/quote]

            Using your #s (the last time I rented a STB I paid $7.99 per basic receiver and $1.99 for CableCARD).

            $1.99 * 12 = UCE + (HSC × HR) = 23.88

            $4.99 * 12 = UCE + (HSC × HR) = 59.88

            (59.88 – 23.88) – 23.88 = $12.12

            So at sufficient volumes the cost is $12.12/unit to add CableCARD. IIRC, even the cable cos were complaining about how much it cost to deploy the feature.

            With many display OEMs struggling (Panasonic lost $9B last year), I doubt they would add a feature that many (including me) would find useless.

            [quote=richard1980]

            In addition, CableLabs publishes their price list, and every publicly traded TV manufacturer publishes their sales data.  Considering that there are far more TVs sold than cable boxes, I would expect a cost of adding a CableCARD slot to a TV to be far lower than adding it to a cable box, since certification and R&D costs get spread over a larger number of units.

            [/quote]

            OC Pricing

            Looking at both of these #s it should be quite clear that small players (like Boxee) are quickly priced out of CableCARD (what this topic is about).

            More importantly, Boxee can already deliver the feature they want in the current environment. Allowing the MSOs to change the rules at this point is taking functionality from them and adding significant cost for no net gain to their end users.

            [quote=richard1980]

            I haven’t seen a TV that was strictly linear in several years.  Pretty much all TVs today come with non-linear capabilities.  However, those non-linear capabilities have not replaced the linear system.  An overwhelming majority of consumers still rely on the linear system because the non-linear system is not yet an acceptable substitute.

            [/quote]

            1) Many displays sold in the last 2-3 years didn’t have OTT features. We all know that OTT isn’t able to replace linear TV delivery yet, but that doesn’t mean that it won’t.

            2) I’m not sure what the point you’re trying to make is. You said you wanted to be able to plug your TV into the wall (+ CableCARD) and be able to watch TV. Unless your TV also has a DVR built-in you’re stuck several decades back – why do you want that?

            [quote=richard1980]

            If you think that, then you are misinterpreting my entire position.  My position is based on what I think will introduce more competition into the market and serve the greater good of the consumers.  Leaving things the way they are is not going to introduce competition into the market.  We can already see that today.  Forcing TV manufacturers to implement CableCARD technology would introduce competition into the market, which would then likely lead to even more competition as more companies get into the market.  Just imagine being able to go to your local electronics store and browse shelves of DVRs.  Or just imagine if your TV had a DVR built right into it.  That’s the kind of market we should have today, but because nobody forced the issue, it hasn’t happened.  It’s time to force the issue.  If I had my way, CableCARD slots would be mandatory like ATSC tuners.

            [/quote]

            Giving MSOs more power is a step backwards. Anyone who argues that we should allow them more control over the systems that can connect to the network is defending them. I would love to be able to choose from a wide selection of DVRs, but the right approach isn’t to let the MSOs lock down things down more. If you want real choice we would have to decouple service from hardware.

            Bundling the DVR in the display is a horrible idea. Just because Panasonic makes a good TV doesn’t mean I want to use (or pay for) their idea of what a good DVR experience is.

            [quote=richard1980]

            That was due to a combination of poor pricing and poor consumer education.  Not that it’s the consumer’s fault…manufacturers and cable companies are to blame.  When a TV with a CableCARD slot is $1000 more than an identical TV without a CableCARD slot, it’s no wonder people don’t pay the extra $1000.  And when cable companies force their own hardware down consumers’ throats, it’s no wonder that consumers don’t seek retail navigation devices.  Additionally, I think it would be interesting to know how many people have a TV with a CableCARD slot and have no idea what it is.

            [/quote]

            That’s how it works. Early adopters are a test market for future success. The dismal showing indicated to display OEMs that they should focus elsewhere.

            [quote=richard1980]

            I don’t know of any consumers that like copy control or DRM.  But it is necessary to keep content creators/owners happy and producing content.

            [/quote]

            I couldn’t disagree more with this statement. I know that they assert this, but DRM is not a necessary evil; it’s just evil.

          • babgvant wrote:

            Using your

            [quote=babgvant]

            Using your #s (the last time I rented a STB I paid $7.99 per basic receiver and $1.99 for CableCARD).

            $1.99 * 12 = UCE + (HSC × HR) = 23.88

            $4.99 * 12 = UCE + (HSC × HR) = 59.88

            (59.88 – 23.88) – 23.88 = $12.12

            So at sufficient volumes the cost is $12.12/unit to add CableCARD.

            [/quote]

            UCE is the actual cost of the equipment.  (HSC x HR) is the cost the cable company spends repairing, installing, and servicing boxes.  Assuming there is a 70/30 ratio on the cost, the UCE for the DTA is $16.71 and the UCE for the regular box is $41.92.  $41.92 – $16.71 – $16.71 = $8.50.  This is the actual difference in UCE for the 2 devices.  UCE costs also include a number of overhead costs including “incidental costs such as sales tax, financing and storage up to the time it is provided to the customer”.  I would say 15% for these incidental costs is sufficient (considering tax rates average somewhere around 8-9%).  $8.50 now becomes $7.23.  So the real cost the cable company has to pay to get a CableCARD slot is $7.23.  But that’s not how much it costs the manufacturer to add the CableCARD capability.  You know the manufacturer is making money selling the boxes, plus they have overhead costs associated with running the company.  I would say the overhead costs and profit margin account for at least 30% of the selling price of their products.  That drops the price difference to $5.06.  That is my estimate for the maximum it really costs a cable box manufacturer to add a CableCARD slot to a cable box, but I think my number is high.  I was fairly fairly conservative with my percentages.  I wouldn’t be surprised if it really cost somewhere in the neighborhood of $2-3.

            And my numbers for the CableCARD and basic box came from my own market (Cox Oklahoma City), although they just changed the rates last month.  The DTA rates I got from some forum posts I found that state Comcast charges $1.99.

            [quote=babgvant]

            IIRC, even the cable cos were complaining about how much it cost to deploy the feature.

            [/quote]

            Of course they were.  Implementing CableCARD costs the cable company much more than just a few extra dollars for the box.  They have to spend a lot of money implementing it into their own infrastructure.  Deploying the security features across an entire cable company could cost millions.

            [quote=babgvant]

            With many display OEMs struggling (Panasonic lost $9B last year), I doubt they would add a feature that many (including me) would find useless.

            [/quote]

            Losing money hasn’t stopped manufacturers from including features that many people find useless.  I find 3D useless, as do many other people.  Yet manufacturers are cranking out 3D TVs left and right.  I also find the connectivity of my TV useless…Netflix, Amazon, DLNA, etc.  And so do many other people…especially people that already have those options via another connected device.  That sure isn’t slowing down the inclusion of those capabilities.

            Besides, what’s an extra few dollars on the sticker anyway?  It’s not like someone is going to refuse to buy a TV because it’s priced $5 higher than the next TV.

            [quote=babgvant]

            Looking at both of these #s it should be quite clear that small players (like Boxee) are quickly priced out of CableCARD (what this topic is about).

            [/quote]

            A company shouldn’t plan to stay small forever.  Like I said, I don’t expect a small company to be able to afford the CableCARD capability right off the bat.

            [quote=babgvant]

            Allowing the MSOs to change the rules at this point is taking functionality from them and adding significant cost for no net gain to their end users.

            [/quote]

            No net gain to their current end users.  Maybe they should set their sights higher than just a tiny minority of the population, and they may actually pick up some new end users.

            Besides, I honestly don’t thing many of Boxee’s customers will shell out $50 for the tuner (especially considering the box has no DVR capability).  As a result, I don’t see many people actually using the live TV functionality of the Boxee Box.  Perhaps if they added DVR functionality that would boost sales a bit, but even with DVR functionality, sales will be severely limited by the lack of compatibility with the US cable system.

            [quote=babgvant]

            2) I’m not sure what the point you’re trying to make is. You said you wanted to be able to plug your TV into the wall (+ CableCARD) and be able to watch TV. Unless your TV also has a DVR built-in you’re stuck several decades back – why do you want that?

            [/quote]

            My point is that the majority of people still rely on linear programming, and they use non-linear capabilities in addition to their linear capabilities.  They aren’t switching from linear to non-linear.  They are doing both.  Which means all these non-linear features that TVs are coming with don’t satisfy the full desires of the consumers.

            And not every TV needs DVR capabilities.  Many people have TVs throughout their home that are used only for live TV.  Unfortunately, this also means that there are a lot of cable company set top boxes installed that are deployed just to make those TVs work.

            Additionally, the reasoning behind me wanting the CableCARD slot in the TV isn’t really to be able to have a plug and play TV.  The plug and play function would increase the popularity of CableCARDs, and thus would spur the introduction of other CableCARD devices into the market.  Ultimately that’s the goal that I would like to see achieved.

            [quote=babgvant]

            Giving MSOs more power is a step backwards. Anyone who argues that we should allow them more control over the systems that can connect to the network is defending them. I would love to be able to choose from a wide selection of DVRs, but the right approach isn’t to let the MSOs lock down things down more. If you want real choice we would have to decouple service from hardware.

            [/quote]

            I agree that real choice involves decoupling service from hardware.  I actually made this same argument in my comments I filed with the FCC before they made the rule changes in October 2010.  Unfortunately, they didn’t listen.  I didn’t think they would, and I don’t think they ever will.  That route is simply not an option, so we have to look at other options to try to get the same end result (competition and choice in the market).  My option is to force the OEMs to put the technology on the market instead of giving them a choice.  We see what happens when they have a choice…they give us ClearQAM hardware, which is useless for most people.

            You can perceive my option as giving MSOs more power, but IMO, they should have had this power years ago.  Quite frankly, I think it’s stupid that certain content can’t be encrypted.  It’s bad enough that the cable companies have to pay to rebroadcast many of those channels, but then to be told that they can’t put security on them is just plain stupid.

            [quote=babgvant]

            Bundling the DVR in the display is a horrible idea. Just because Panasonic makes a good TV doesn’t mean I want to use (or pay for) their idea of what a good DVR experience is.

            [/quote]

            I personally agree with you, but I also know there are many people that would actually prefer that kind of product.

            [quote=babgvant]

            I couldn’t disagree more with this statement. I know that they assert this, but DRM is not a necessary evil; it’s just evil.

            [/quote]

            DRM is necessary because that’s what the content owners/creators require before they will release their content.  Without DRM, our selection of content would be severely limited.

          • richard1980 wrote:UCE is the

            [quote=richard1980]

            UCE is the actual cost of the equipment.  (HSC x HR) is the cost the cable company spends repairing, installing, and servicing boxes.  Assuming there is a 70/30 ratio on the cost, the UCE for the DTA is $16.71 and the UCE for the regular box is $41.92.  $41.92 – $16.71 – $16.71 = $8.50.  This is the actual difference in UCE for the 2 devices.  UCE costs also include a number of overhead costs including “incidental costs such as sales tax, financing and storage up to the time it is provided to the customer”.  I would say 15% for these incidental costs is sufficient (considering tax rates average somewhere around 8-9%).  $8.50 now becomes $7.23.  So the real cost the cable company has to pay to get a CableCARD slot is $7.23.  But that’s not how much it costs the manufacturer to add the CableCARD capability.  You know the manufacturer is making money selling the boxes, plus they have overhead costs associated with running the company.  I would say the overhead costs and profit margin account for at least 30% of the selling price of their products.  That drops the price difference to $5.06.  That is my estimate for the maximum it really costs a cable box manufacturer to add a CableCARD slot to a cable box, but I think my number is high.  I was fairly fairly conservative with my percentages.  I wouldn’t be surprised if it really cost somewhere in the neighborhood of $2-3.

            [/quote]

            Somewhere along the way we went from something that was semi-calculable to a serious guess. Even if we were to ignore the logic behind that dart throw, $3-$10 is a lot of cost for a display that retails for < $200 and that number would require a huge amount of scale. I don’t see how this is reasonable in any way.

            [quote=richard1980]

            And my numbers for the CableCARD and basic box came from my own market (Cox Oklahoma City), although they just changed the rates last month.  The DTA rates I got from some forum posts I found that state Comcast charges $1.99.

            [/quote]

            When I paid $7.99/month for the STB I had Comcast. It’s also worth mentioning that when I canceled service and couldn’t find one the boxes they wanted to charge me $60 for it so I’m not sure how accurate any of those #s are.

            [quote=richard1980]

            Of course they were.  Implementing CableCARD costs the cable company much more than just a few extra dollars for the box.  They have to spend a lot of money implementing it into their own infrastructure.  Deploying the security features across an entire cable company could cost millions.

            [/quote]

            So it cost them millions to implement the tech that everyone else is supposed to use? (Let’s be clear here, they weren’t complaining about CableCARD, but having to use it themselves).

            [quote=richard1980]

            Losing money hasn’t stopped manufacturers from including features that many people find useless.  I find 3D useless, as do many other people.  Yet manufacturers are cranking out 3D TVs left and right.  I also find the connectivity of my TV useless…Netflix, Amazon, DLNA, etc.  And so do many other people…especially people that already have those options via another connected device.  That sure isn’t slowing down the inclusion of those capabilities.

            [/quote]

            Those people are wrong; 3D and OTT sells TVs. More importantly, the things that make 3D good make 2D better so everyone wins.

            [quote=richard1980]

            A company shouldn’t plan to stay small forever.  Like I said, I don’t expect a small company to be able to afford the CableCARD capability right off the bat.

            [/quote]

            Kind of circular don’t you think? You need scale to afford CableCARD, can’t get scale without CableCARD…

            [quote=richard1980]

            No net gain to their current end users.  Maybe they should set their sights higher than just a tiny minority of the population, and they may actually pick up some new end users.

            [/quote]

            No net gain in features or functionality. Live TV support is for content that makes sense to consume linearly.

            [quote=richard1980]

            Besides, I honestly don’t thing many of Boxee’s customers will shell out $50 for the tuner (especially considering the box has no DVR capability).  As a result, I don’t see many people actually using the live TV functionality of the Boxee Box.  Perhaps if they added DVR functionality that would boost sales a bit, but even with DVR functionality, sales will be severely limited by the lack of compatibility with the US cable system.

            [/quote]

            You’re missing the point of Boxee.

            [quote=richard1980]

            My point is that the majority of people still rely on linear programming, and they use non-linear capabilities in addition to their linear capabilities.  They aren’t switching from linear to non-linear.  They are doing both.  Which means all these non-linear features that TVs are coming with don’t satisfy the full desires of the consumers.

            [/quote]

            True, the majority of people do. But those are probably the same people who have a DVR and watch most of their TV live (i.e. it’s a different market segment).

            I think there is a significant pool of people who don’t care about PQ and would use something like Boxee if they had access to live sports; that’s what the dongle is for. Why not let them try to deliver value to these people? Why squash this potential market? Why do you care about it anyway? If it’s too small for them to be profitable why not let the market sort it out instead of letting the MSOs change the rules mid game?

            [quote=richard1980]

            Additionally, the reasoning behind me wanting the CableCARD slot in the TV isn’t really to be able to have a plug and play TV.  The plug and play function would increase the popularity of CableCARDs, and thus would spur the introduction of other CableCARD devices into the market.  Ultimately that’s the goal that I would like to see achieved.

            [/quote]

            I doubt we will ever see another display with CableCARD built in.

            [quote=richard1980]

            My option is to force the OEMs to put the technology on the market instead of giving them a choice.  We see what happens when they have a choice…they give us ClearQAM hardware, which is useless for most people.

            [/quote]

            OEMs tried CableCARD, it failed. ClearQAM is there already, any change would devalue existing hardware. Why not let the market figure it out?

            [quote=richard1980]

            You can perceive my option as giving MSOs more power, but IMO, they should have had this power years ago.

            [/quote]

            I’m not sure how anyone could perceive it as anything but a power grab, or your stance as anything but a defense of that encroachment.

            [quote=richard1980]

            Quite frankly, I think it’s stupid that certain content can’t be encrypted.  It’s bad enough that the cable companies have to pay to rebroadcast many of those channels, but then to be told that they can’t put security on them is just plain stupid.

            [/quote]

            TBH, I’m not sure how to even approach this statement. Wow, just wow.

            [quote=richard1980]

            I personally agree with you, but I also know there are many people that would actually prefer that kind of product.

            [/quote]

            Then they can demand it. Pretty sure I’ve seen prototypes for this sort of thing that never made it to market. I doubt they would last long if they did; the market is ruthless towards bad ideas.

            [quote=richard1980]

            DRM is necessary because that’s what the content owners/creators require before they will release their content.  Without DRM, our selection of content would be severely limited.

            [/quote]

            Everyone is entitled to an opinion.

          • babgvant wrote:

            Somewhere

            [quote=babgvant]

            Somewhere along the way we went from something that was semi-calculable to a serious guess. Even if we were to ignore the logic behind that dart throw, $3-$10 is a lot of cost for a display that retails for < $200 and that number would require a huge amount of scale. I don’t see how this is reasonable in any way.

            [/quote]

            I’m just trying to be as realistic as possible.  The only guessing involved is guessing at how many indirect costs are built into the price.  I don’t think it’s fair to ignore those indirect costs, but if you want, just ignored them and go with the $12 figure you came up with.  It doesn’t really matter to me.  $5 or $12, the point remains…it’s cheap.  Well, at least I think it is.  You seem to think that’s a lot of money.

            [quote=babgvant]

            When I paid $7.99/month for the STB I had Comcast. It’s also worth mentioning that when I canceled service and couldn’t find one the boxes they wanted to charge me $60 for it so I’m not sure how accurate any of those #s are.

            [/quote]

            $7.99 for a basic (standard definition, non DVR) box?  You’ve got to be kidding me.  That’s my current rate for an HD DVR box.  Something isn’t right with this picture…

            [quote=babgvant]

            So it cost them millions to implement the tech that everyone else is supposed to use? (Let’s be clear here, they weren’t complaining about CableCARD, but having to use it themselves).

            [/quote]

            That’s the entire point of CableCARD…that way you can tell them you don’t want their $7.99 box, you buy your own product, and lease a CableCARD from them instead.

            It sounds like you are defending the cable companies…as if you don’t want to be able to choose your own hardware.  Would you rather be locked into their $7.99 box every month?

            [quote=babgvant]

            Those people are wrong; 3D and OTT sells TVs. More importantly, the things that make 3D good make 2D better so everyone wins.

            [/quote]

            You don’t want to pay for a CableCARD slot, but you want me to pay for 3D and OTT?  And 3D doesn’t sell TVs.  TVs sell 3D.  Consumer interest in 3D started out low and still remains low today.  Despite the fact that consumers are not really interested in 3D, TV manufacturers decided to force 3D onto consumers.  I’m not sure if you have noticed the trend, but TV manufacturers are phasing out their 2D products and are replacing them with 3D products.  Blu-ray player manufacturers are doing the same thing.  The end result is forced widespread adoption of 3D TVs and Blu-ray players.  By forcing the hardware onto consumers, the consumer interest in 3D should rise.

            I honestly don’t understand how you can say it’s ok to do this with 3D, but it’s not ok to do this with CableCARD.  That seems very hypocritical to me.

            [quote=babgvant]

            Kind of circular don’t you think? You need scale to afford CableCARD, can’t get scale without CableCARD…

            [/quote]

            You can get scale without CableCARD.  But as long as a company shuns CableCARD, or any other technology that the masses have adopted, they’ll never go anywhere.  They’ll just stay at the bottom and eventually they won’t have anyone to sell to.

            [quote=babgvant]

            You’re missing the point of Boxee.

            [/quote]

            No, I fully understand the point of Boxee.  It’s a cord cutter device.  Unfortunately, cord cutting is all hype.  Industry data proves it.  After all the hype about how people were frantically cutting the cord, the real numbers tell a different story.  The cord cutter losses the pay TV industry suffered (IIRC, about 300,000 total customers) have all been erased and more customers have been added.

            [quote=babgvant]

            I think there is a significant pool of people who don’t care about PQ and would use something like Boxee if they had access to live sports; that’s what the dongle is for. Why not let them try to deliver value to these people? Why squash this potential market? Why do you care about it anyway? If it’s too small for them to be profitable why not let the market sort it out instead of letting the MSOs change the rules mid game?

            [/quote]

            First, most ClearQAM content can be obtained OTA.  There’s really no need to tap into the cable line when you can get the same content OTA.  Additionally, the market for this is very small.  It seems a bit stupid to make everyone suffer just to keep a few people happy.  On top of that, I honestly don’t see the FCC allowing the encryption of the basic tiers without also requiring MSOs to hand out free boxes to customers that only subscribe to the basic tier, which means Boxee’s dongle would still work for legitimate customers.  Of course, for people that aren’t paying the cable bill, they’d be screwed, but I have no sympathy for someone that won’t pay.  If you don’t want to pay, get your content OTA.  And as for why I care, I thought it was pretty clear:  Boxee’s position influences the FCCs decision, and as a result, has a direct impact on the future market for CableCARD and its successor.

            [quote=babgvant]

            ClearQAM is there already, any change would devalue existing hardware.

            [/quote]

            See my statement above about the free box.

            [quote=babgvant]

            Why not let the market figure it out?

            [/quote]

            Because we tried that and it didn’t work.

            [quote=babgvant]

            TBH, I’m not sure how to even approach this statement. Wow, just wow.

            [/quote]

            I take it you disagree with my statement.  Great, I guess that means you won’t mind removing the password protection from your wireless network.  Just let your neighbors use it any time they want….for free.  While you are at it, stop locking the doors to your residence.  Just let people (including thieves) enter your residence whenever they want.

            I wonder how long you would put up with that before you’d start wanting to password protect your network and lock your doors.

          • richard1980 wrote:I’m just

            [quote=richard1980]

            I’m just trying to be as realistic as possible.  The only guessing involved is guessing at how many indirect costs are built into the price.  I don’t think it’s fair to ignore those indirect costs, but if you want, just ignored them and go with the $12 figure you came up with.  It doesn’t really matter to me.  $5 or $12, the point remains…it’s cheap.  Well, at least I think it is.  You seem to think that’s a lot of money.

            [/quote]

            What’s the cheapest TV you can buy? In a $100-200 device $12 isn’t cheap. What’s more important is that 1) that # requires a lot of scale and 2) even the $12 is a guess. Seeing how the DCT you can actually buy is > $50 a tuner it could easily price out small display manufactures and more importantly (since it’s what this topic is about) it would clearly add a lot of cost to the Boxee Box.

            [quote=richard1980]

            $7.99 for a basic (standard definition, non DVR) box?  You’ve got to be kidding me.  That’s my current rate for an HD DVR box.  Something isn’t right with this picture…

            [/quote]

            Yep, and the $60 was for a DTA; so not even a real cable box.

            [quote=richard1980]

            That’s the entire point of CableCARD…that way you can tell them you don’t want their $7.99 box, you buy your own product, and lease a CableCARD from them instead.

            [/quote]

            Yep, but the point here is that they didn’t want to eat their own dog food because even they thought it was too expensive to implement in practice.

            [quote=richard1980]

            It sounds like you are defending the cable companies…as if you don’t want to be able to choose your own hardware.  Would you rather be locked into their $7.99 box every month?

            [/quote]

            Eh? Not sure how you got that.

            [quote=richard1980]

            You don’t want to pay for a CableCARD slot, but you want me to pay for 3D and OTT?  And 3D doesn’t sell TVs. 

            I honestly don’t understand how you can say it’s ok to do this with 3D, but it’s not ok to do this with CableCARD.  That seems very hypocritical to me.

            [/quote]

            No, you can buy a TV w/o these features if you want (I don’t know why you would since 3D = better 2D and OTT = network connectivity in the display, but again everyone is entitled to an opinion). I have no problem with display OEMs making a CableCARD TV, the problem is when this is non-optional (i.e. mandated); removing consumer choice.

            [quote=richard1980]

            You can get scale without CableCARD.  But as long as a company shuns CableCARD, or any other technology that the masses have adopted, they’ll never go anywhere.  They’ll just stay at the bottom and eventually they won’t have anyone to sell to.

            [/quote]

            How? W/o access to the full lineup a TV consumption device has little appeal to the mass market. Boxee’s success is currently tied to a small niche of people who don’t want that, for them to break out of the smallest niche they need access to some TV (sports). Why not let this play out and see what happens. We only “need” cable now because it’s all we have.

            [quote=richard1980]

            No, I fully understand the point of Boxee.  It’s a cord cutter device.  Unfortunately, cord cutting is all hype.  Industry data proves it.  After all the hype about how people were frantically cutting the cord, the real numbers tell a different story.  The cord cutter losses the pay TV industry suffered (IIRC, about 300,000 total customers) have all been erased and more customers have been added.

            [/quote]

            I disagree with that unless you are speaking only to the large scale trend. OTT delivery isn’t developed enough yet to appeal to a large number of people, but Boxee doesn’t require that kind of scale to be successful.

            When I look at the shift in behavior in my kids away from recorded TV (limited choices) to services like Netflix and Amazon (much less limited), this is a problem that only requires time and bandwidth to play out. It’s not surprising to me that MSOs would start fighting this now, with the tools that they have.

            [quote=richard1980]

            First, most ClearQAM content can be obtained OTA.  There’s really no need to tap into the cable line when you can get the same content OTA.  Additionally, the market for this is very small.  It seems a bit stupid to make everyone suffer just to keep a few people happy. 

            [/quote]

            Better to make everyone suffer with higher display prices so that you can be happy?

            I don’t see any connection b/w encrypted ClearQAM and reduced consumer suffering.

            [quote=richard1980]

            On top of that, I honestly don’t see the FCC allowing the encryption of the basic tiers without also requiring MSOs to hand out free boxes to customers that only subscribe to the basic tier, which means Boxee’s dongle would still work for legitimate customers.

            [/quote]

            How’s that? Like a DTA + IR Blaster? That would be a huge step backwards both in functionality and carbon footprint (remember, that’s why we should let the MSOs do this :)).

            [quote=richard1980]

            Because we tried that and it didn’t work.

            [/quote]

            I think you mean it didn’t work out the way you wanted. I’d argue that, in this case, the market functioned as intended (i.e. no consumer demand = no product).

            [quote=richard1980]

            I take it you disagree with my statement.  Great, I guess that means you won’t mind removing the password protection from your wireless network.  Just let your neighbors use it any time they want….for free.  While you are at it, stop locking the doors to your residence.  Just let people (including thieves) enter your residence whenever they want.

            [/quote]

            And the disconnect grows…

          • babgvant wrote:
            What’s the

            [quote=babgvant]What’s the cheapest TV you can buy? In a $100-200 device $12 isn’t cheap. What’s more important is that 1) that # requires a lot of scale and 2) even the $12 is a guess. Seeing how the DCT you can actually buy is > $50 a tuner it could easily price out small display manufactures and more importantly (since it’s what this topic is about) it would clearly add a lot of cost to the Boxee Box.[/quote]

            We’ll just have to agree to disagree on whether or not $12 is cheap in a $100 TV.  Personally, if I was in the market for that kind of device, I’d pay $112 just as easily as I’d pay $100.  As far as current tuner pricing goes, what people will pay for a device and what it actually costs the manufacturer to produce that device are two different things.  You know as well as I do that demand drives market price.

            [quote=babgvant]Yep, but the point here is that they didn’t want to eat their own dog food because even they thought it was too expensive to implement in practice.[/quote]

            Yeah, by “it’s too expensive” they really mean “it cuts into our profit margin”.  And no cable company really wants to see an open market where you don’t have to pay them for their hardware.  So of course no matter what kind of technology you introduce to them, they are always going to come up with excuses why they shouldn’t have to implement it…unless of course they think they can make more money off of the new technology.

            [quote=babgvant]Eh? Not sure how you got that.[/quote]

            Just the tone of your comment…maybe I misjudged.

            [quote=babgvant]No, you can buy a TV w/o these features if you want (I don’t know why you would since 3D = better 2D and OTT = network connectivity in the display, but again everyone is entitled to an opinion). I have no problem with display OEMs making a CableCARD TV, the problem is when this is non-optional (i.e. mandated); removing consumer choice.[/quote]

            I don’t see how making CableCARD non-optional is any different than making 3D non-optional (which is what the TV and Blu-ray player manufacturers are quickly doing).  And if you are so opposed to mandatory features, I wonder how you feel about the FCC requiring digital OTA broadcasts (as opposed to allowing stations to drag their feet and broadcast in analog), or ATSC tuners in TVs (so that you can be guaranteed that when you buy a TV, it will work with our OTA broadcast system).  Today we see great benefits from those mandates.  If not for those rules, we’d still have a lot of OTA stations broadcasting in analog because “it’s too expensive to upgrade to digital”, and we’d have TVs that lack ATSC tuners, because again, “it’s too expensive to add ATSC tuners”.

            I also wonder how you feel about specifications.  Surely you must appreciate the fact that 3D TVs now have to conform to a set of standards to ensure compatibility.

            [quote=babgvant]How? W/o access to the full lineup a TV consumption device has little appeal to the mass market. Boxee’s success is currently tied to a small niche of people who don’t want that, for them to break out of the smallest niche they need access to some TV (sports). Why not let this play out and see what happens. We only “need” cable now because it’s all we have.[/quote]

            There’s an old saying… “The sacrifice of a few for the good of many”.  That makes sense.  What doesn’t make sense is “The sacrifice of many for the good of a few”, which is what you would rather see.  Hold the many CableCARD users back just to keep a few non-CableCARD users happy.

            [quote=babgvant]I disagree with that unless you are speaking only to the large scale trend.[/quote]

            All I’m saying is there are a lot of people that got very excited about nothing, and for a while you couldn’t browse the internet without running into some article about cord cutting.  Looking at all of those articles, you would have thought cutting the cord was the next best thing since sliced bread and everyone was doing it.  But the real subscriber numbers told a different story.  When you look at the real subscriber changes across the entire pay TV industry, cord cutting was just a temporary and very minor trend.  In reality, cord cutters are an insignificant minority, and thinking of them as anything else is foolish.

            [quote=babgvant]Better to make everyone suffer with higher display prices so that you can be happy?

            I don’t see any connection b/w encrypted ClearQAM and reduced consumer suffering.[/quote]

            Versus your option…better to make everyone suffer with limited choices for hardware to use to consume their cable TV content so that a few cable thieves and cheapskates can be happy.  Nevermind the fact that the majority of people are paying $5-10 (or more) per month for a box when they really shouldn’t be.

            If you can’t see the connection, I’d suggest you open the lid to your box and pop your head out.

            [quote=babgvant]How’s that? Like a DTA + IR Blaster? That would be a huge step backwards both in functionality and carbon footprint (remember, that’s why we should let the MSOs do this Smile).[/quote]

            Perhaps that would make Boxee re-think their position.  You wouldn’t need a DTA+IR blaster if the box had a CableCARD slot.

            But the point I was trying to make is encrypting the channels wouldn’t render Boxee’s tuner useless.

            [quote=babgvant]I think you mean it didn’t work out the way you wanted. I’d argue that, in this case, the market functioned as intended (i.e. no consumer demand = no product).[/quote]

            It didn’t work out the way the FCC wanted.  The FCC wanted an open and competitive market.  You see how open and competitive our market is today….it’s not.  To achieve the end result of an open and competitive market, a more aggressive strategy must be implemented.

            And you are taking consumer ignorance and lack of OEM support to mean lack of consumer demand, which is certainly not true.  I can all but guarantee you that if there was as much effort putting into selling CableCARD slots as there currently is for selling 3D or OTT, retail CableCARD devices would take off.  And I don’t mean following TiVo’s ridiculous pricing model.

            [quote=babgvant]And the disconnect grows…[/quote]

            Hey, you are the one that seems to disagree with security.  I’m just trying to put you in the other set of shoes.  What’s good for the goose is good for the gander.

          • richard1980 wrote:We’ll just

            [quote=richard1980]

            We’ll just have to agree to disagree on whether or not $12 is cheap in a $100 TV.  Personally, if I was in the market for that kind of device, I’d pay $112 just as easily as I’d pay $100. 

            [/quote]

            12% of the total cost isn’t expensive? Considering all the other parts that make up a TV, it seems high to me.

            [quote=richard1980]

            As far as current tuner pricing goes, what people will pay for a device and what it actually costs the manufacturer to produce that device are two different things.  You know as well as I do that demand drives market price.

            [/quote]

            If you refer back to our failed lesson in economics, you find that in the long run price = marginal cost. While I don’t think that we’ve reached “the long run” when it comes to standalone DCT,  given the significant movement in price when new players entered and the lack of significant change since we’re not in the front end of “short term” either.

            I read something earlier today where Boxee states that it their tuner would have cost 2-3x what it does if it was a DCT. Obviously, this statement is a bit biased, but given the current $/tuner it’s not totally unrealistic given their scale.

            [quote=richard1980]

            Yeah, by “it’s too expensive” they really mean “it cuts into our profit margin”.  And no cable company really wants to see an open market where you don’t have to pay them for their hardware.  So of course no matter what kind of technology you introduce to them, they are always going to come up with excuses why they shouldn’t have to implement it…unless of course they think they can make more money off of the new technology.

            [/quote]

            If it cuts into their profits enough to publicly complain, don’t you think that’s a good indicator that perhaps we’re not talking about “virtually nothing” on the bottom line.

            [quote=richard1980]

            Just the tone of your comment…maybe I misjudged.

            [/quote]

            It is safe to assume that I will require a sound justification from pretty much anything that limits consumer freedom, choice and flexibility. Mandatory CableCARD combined with the death of ClearQAM is exactly that.

            [quote=richard1980]

            I don’t see how making CableCARD non-optional is any different than making 3D non-optional (which is what the TV and Blu-ray player manufacturers are quickly doing). 

            [/quote]

            There is a difference b/w a de facto practice and a mandate. 3D and OTT are not really either. Even assuming an imperfect market, where there is demand there will be supply. There is little to suggest that 3D is anything but a normal supplier response to demand (even if that demand was originally contrived). Given the way these things generally sort themselves out in one/two iterations, seeing how we are on the 3rd…

            [quote=richard1980]

            I also wonder how you feel about specifications.  Surely you must appreciate the fact that 3D TVs now have to conform to a set of standards to ensure compatibility.

            [/quote]

            I’m not sure why you want to pursue this point since it is immaterial to pretty much everything discussed in the thread so far.

            Obviously specifications are necessary for any degree of interoperability. Asking a question like this is like asking how I feel about English; a shared lexicon is fundamental to any conversation whether it is b/w people or systems.

            [quote=richard1980]

            There’s an old saying… “The sacrifice of a few for the good of many”.  That makes sense.  What doesn’t make sense is “The sacrifice of many for the good of a few”, which is what you would rather see.  Hold the many CableCARD users back just to keep a few non-CableCARD users happy.

            better to make everyone suffer with limited choices for hardware to use to consume their cable TV content so that a few cable thieves and cheapskates can be happy.  Nevermind the fact that the majority of people are paying $5-10 (or more) per month for a box when they really shouldn’t be.

            [/quote]

            This is not a zero-sum game. You don’t have to euthanize ClearQAM to get CableCARD; we already have both, coexisting.

            [quote=richard1980]

            All I’m saying is there are a lot of people that got very excited about nothing, and for a while you couldn’t browse the internet without running into some article about cord cutting.

            [/quote]

            Reclaiming $50-100/month is exciting to many people. I can see why it is a popular topic.

            [quote=richard1980]

            If you can’t see the connection, I’d suggest you open the lid to your box and pop your head out.

            [/quote]

            Should have figured it was just a matter of time before ad hominem stopped by again.

            [quote=richard1980]

            Perhaps that would make Boxee re-think their position.  You wouldn’t need a DTA+IR blaster if the box had a CableCARD slot.

            [/quote]

            Picking a poison isn’t a real choice.

            [quote=richard1980]

            But the point I was trying to make is encrypting the channels wouldn’t render Boxee’s tuner useless.

            [/quote]

            Just mostly so.

            [quote=richard1980]

            It didn’t work out the way the FCC wanted. 

            [/quote]

            The market working isn’t always pretty. The FCC tried to have it both ways; and did it all wrong. They tried to keep the MSOs happy by letting them design the interface, and shockingly enough we got a solution that priced out real consumer choice.

            [quote=richard1980]

            Hey, you are the one that seems to disagree with security.  I’m just trying to put you in the other set of shoes.  What’s good for the goose is good for the gander.

            [/quote]

            DRM != security. Physical != intangible. Rivalrous != non-rivalrous.

            We have demonstrated previously that the disconnect b/w this, and previous related, statements and my perception of reality is too wide to bridge. You are entitled to believe whatever you like, but I have no interest in following this rabbit hole again.

          • babgvant wrote:
            12% of the

            [quote=babgvant]12% of the total cost isn’t expensive? Considering all the other parts that make up a TV, it seems high to me.[/quote]
            12% of the total cost is just a high percentage of the total cost.  That doesn’t make it expensive.  Aside from poor people, I don’t know anyone that would say a $112 TV is expensive.  I am fairly certain that most would agree $112 is very cheap for a TV.
            [quote=babgvant]
            If you refer back to our failed lesson in economics, you find that in the long run price = marginal cost. While I don’t think that we’ve reached “the long run” when it comes to standalone DCT,  given the significant movement in price when new players entered and the lack of significant change since we’re not in the front end of “short term” either.
             
            I read something earlier today where Boxee states that it their tuner would have cost 2-3x what it does if it was a DCT. Obviously, this statement is a bit biased, but given the current $/tuner it’s not totally unrealistic given their scale.
            [/quote]

            In the long run price=marginal cost?  Hardly.  If that were the case, no business would ever show a profit.  In the long run, all costs are marginal.  Cost and price are not the same thing.

            As far as Boxee’s tuner cost, I have no doubt that a CableCARD tuner would cost Boxee 2-3x what an ATSC/ClearQAM tuner costs when scaled down to Boxee’s production rate.  What we don’t know is how much Boxee has to pay for their ATSC/ClearQAM tuner.  And I seriously doubt Boxee would need to change their asking price by that amount.  Considering of course that they want $50 for their tuner and you can get a DCR-2650 for $62.50 per tuner at Newegg.

            [quote=babgvant]If it cuts into their profits enough to publicly complain, don’t you think that’s a good indicator that perhaps we’re not talking about “virtually nothing” on the bottom line.[/quote]

            Over the large scale, it translates into a lot of money….millions of dollars to actually implement it, and millions more in potential losses as consumers stop paying for the cable company’s equipment.  The threat of losing $5-10 per month from customers translates into significantly more potential losses than actually implementing the technology.  IMO, that was the real reason for the complaints.  But of course, you can see that cable companies have done everything they can to bury 3rd party devices.  Hence the reason for the recent rule changes.

            [quote=babgvant]
            There is little to suggest that 3D is anything but a normal supplier response to demand (even if that demand was originally contrived). Given the way these things generally sort themselves out in one/two iterations, seeing how we are on the 3rd…
            [/quote]

            I guess actual consumer opinions of 3D mean nothing.  The fact that there is a huge disconnect between how many 3D TVs are sold and how many 3D Blu-rays are sold must be irrelevant.

            If you think there is enough demand for 3D to justify the phase-out of 2D, you are mistaken.  The phase-out of 2D is just a strategy to get more money from consumers and increase the popularity of 3D.

            Just look at it this way:  Millions of people bought Windows Media Center (by buying a copy of Windows that contains WMC).  It’s not popular.

            [quote=babgvant]
            I’m not sure why you want to pursue this point since it is immaterial to pretty much everything discussed in the thread so far.
            [/quote]

            It has to do with things being mandatory.  You said there is a problem with things being mandatory.  Mandatory ATSC tuners and mandatory 3D format support in 3D TVs must be a bad thing.

            [quote=babgvant]
            You don’t have to euthanize ClearQAM to get CableCARD; we already have both, coexisting.
            [/quote]

            ClearQAM tuners are widely available in the retail market even though they are virtually useless to most consumers.  CableCARD tuners are scarcely available in the retail market even though the majority of consumers require them.  In a perfect system, CableCARD tuners would be as common as ClearQAM tuners, but as you can see today, we are far from a perfect system.

            [quote=babgvant]
            Should have figured it was just a matter of time before ad hominem stopped by again.
            [/quote]

            I’m just saying, think outside the box.  You can’t see any connection between encrypted QAM and reduced consumer suffering.  Think outside the box a bit.

            Encrypted QAM -> ClearQAM tuners useless -> ClearQAM tuners replaced by CableCARD tuners -> CableCARD tuner presence in the retail market goes up -> Consumers have more choices -> Reduced consumer suffering.

            All you are seeing is how a few people will suffer in the beginning, but you aren’t seeing how the overall market suffers less.

            [quote=babgvant]
            The market working isn’t always pretty. The FCC tried to have it both ways; and did it all wrong. They tried to keep the MSOs happy by letting them design the interface, and shockingly enough we got a solution that priced out real consumer choice.
            [/quote]

            I agree that they did it wrong, but we can’t change the past.  We also can’t wait around forever for the FCC to propose the right option.

            [quote=babgvant]
            DRM != security.
            [/quote]

            Do not confuse conditional access with DRM.  They are two completely different topics.

          • richard1980 wrote:Aside from

            [quote=richard1980]

            Aside from poor people, I don’t know anyone that would say a $112 TV is expensive. 

            [/quote]

            When defining policy it is important to think critically about how it will affect everyone, especially those with limited resources. This is even more important now that we have defined money as a form of speech in our society; giving those with it, a way to amplify their voices to the detriment of those without.

            [quote=richard1980]

            In the long run price=marginal cost?  Hardly.  If that were the case, no business would ever show a profit.  In the long run, all costs are marginal.  Cost and price are not the same thing.

            [/quote]

            It is a basic concept in economics that in a competitive market the difference b/w price and marginal cost approaches zero over time. Given enough time (i.e. the long run) in theory they will be equal at some point as firms attempt to maximize profit (the area b/w the curves). Wikipedia’s article on MC covers this briefly in the section labeled “Decisions taken based on marginal costs“, but there are many other resources available that will go into more detail if necessary.

            A little OT, but this is an especially interesting concept as it applies to goods where the marginal cost approaches zero (aka Infinite Goods).

            [quote=richard1980]

            Over the large scale, it translates into a lot of money….millions of dollars to actually implement it, and millions more in potential losses as consumers stop paying for the cable company’s equipment. 

            [/quote]

            How is this cost and risk problem fundamentally any different (obviously it’s a little different because of the lack of monopoly power, and the names are changed) from the one faced by CE OEMs?

            [quote=richard1980]

            I guess actual consumer opinions of 3D mean nothing.  The fact that there is a huge disconnect between how many 3D TVs are sold and how many 3D Blu-rays are sold must be irrelevant.

            [/quote]

            How many BD/HDDVD were sold three years into the HDTV launch? Rhetorical of course because they didn’t exist yet. In historical context 3D is doing much better than HD was at the same point in time.

            Like many new markets, 3D has a chicken/egg problem. So I think the more interesting number is how 3D title availability has changed year-to-year, and how well increased supply translates into sales. As the install base grows we are seeing more (and higher quality) 3D title releases, which is consistent with a properly functioning market.

            It is not in the OEMs interest to push unpopular features, that’s not how markets work over time. If enough consumer demanded the absence of 3D, we would see it go away the same way we’ve seen other technologies fail to gain critical mass in the marketplace and fade from the scene (e.g. CableCARD enabled TVs). Instead of this we’ve seen the opposite; with multiple forms of 3D pushing its way down the HDTV line ups into all but the most budget offerings. While I can appreciate that some don’t care for 3D, it’s hard to see the penetration as anything but market forces properly executing to match supply with demand.

            [quote=richard1980]

            If you think there is enough demand for 3D to justify the phase-out of 2D, you are mistaken.  The phase-out of 2D is just a strategy to get more money from consumers and increase the popularity of 3D.

            [/quote]

            Wait, 2D is gone? Last I checked CE OEMs were just adding 3D. In the CE marketplace, prices are consistent or falling year-over-year while the quality and feature count goes up. I fail to see how this is a problem. When I look at what I’ve paid for HDTVs over the years, it is astounding how much more I get for my $ each time.

            Are you really comparing a well executed e.g. of how markets function to how the MSOs and FCC have handled CableCARD?

            [quote=richard1980]

            Just look at it this way:  Millions of people bought Windows Media Center (by buying a copy of Windows that contains WMC).  It’s not popular.

            [/quote]

            Yep. WMC is a value-add feature like Paint and Wordpad. How is this related to the FCC killing ClearQAM?

            [quote=richard1980]

            It has to do with things being mandatory.  You said there is a problem with things being mandatory.  Mandatory ATSC tuners and mandatory 3D format support in 3D TVs must be a bad thing.

            [/quote]

            1) 3D support isn’t mandatory (or at least I missed the FCC docs on it)

            2) How I feel about mandatory ATSC vs. ATSC as a specification are totally unrelated.

            3) Mandates aren’t bad per se; those that remove consumer choice, flexibility and freedom with no tangible gain are.

            [quote=richard1980]

            ClearQAM tuners are widely available in the retail market even though they are virtually useless to most consumers. 

            [/quote]

            Eh? I’d love to see numbers to back this up.

            [quote=richard1980]

            CableCARD tuners are scarcely available in the retail market even though the majority of consumers require them. 

            [/quote]

            You need to heavily qualify this statement even approach validity.

            E.g.

            1) cable (i.e. there is a net loss to those w/o cable service, like OTA users and satellite subscribers) consumers

            2) could (i.e. this assumes that they wouldn’t rather have a DVR, like the 40% of households that currently have one) require them

            [quote=richard1980]

            I’m just saying, think outside the box.  You can’t see any connection between encrypted QAM and reduced consumer suffering.  Think outside the box a bit.

            [/quote]

            Yes. It is my limited thinking, a fundamental flaw in the man, that precludes agreement.

            [quote=richard1980]

            Encrypted QAM -> ClearQAM tuners useless -> ClearQAM tuners replaced by CableCARD tuners -> CableCARD tuner presence in the retail market goes up -> Consumers have more choices -> Reduced consumer suffering.

            [/quote]

            That’s a fairly optimistic stance. I doubt that removing an option (ClearQAM) will net consumers more choices.

            How does adding $2 to the monthly bill help basic cable subscribers who can currently get their full line-up by plugging my TV into the wall?

          • babgvant wrote:
            When defining

            [quote=babgvant]When defining policy it is important to think critically about how it will affect everyone, especially those with limited resources.[/quote]

            If $12 is so much of a burden on someone, perhaps they shouldn’t be buying a TV in the first place.

            [quote=babgvant]How is this cost and risk problem fundamentally any different (obviously it’s a little different because of the lack of monopoly power, and the names are changed) from the one faced by CE OEMs?[/quote]

            A CE OEM only needs to modify the end-user hardware they are already building, but a cable company has to buy all new end-user hardware (which means the incur the full cost of the hardware, not just the difference between a ClearQAM tuner and a CableCARD tuner).  This alone puts more cost on the cable company than a CE OEM.  In addition to that, the cable company must also implement the required technology within their own system so that end-user hardware actually works, which costs even more money.  Plus they risk losing the revenue that they are already receiving from people that are renting STBs.

            [quote=babgvant]Yep. WMC is a value-add feature like Paint and Wordpad. How is this related to the FCC killing ClearQAM?[/quote]

            It’s actually related to the 3D aspect of our discussion.  It just goes to show that just because a product gets sold doesn’t mean there was ever actually a demand for that product.  There are millions upon millions of copies of WMC deployed.  Yet, demand has always been extremely low for it.

            [quote=babgvant]Wait, 2D is gone? Last I checked CE OEMs were just adding 3D.[/quote]

            In 2010, Panasonic only launched two 3D TV series’ in the US…the GT and the VT series.  But in 2011, they launched even more.  In 2011, 60% of the plasma line was 3D (3 series’ out of 5 total), and 17% of Panasonic’s LCD TVs were 3D capable (1 out of 6).   Overall, only 36% of the 2011 lineup was 3D.  Upcoming for 2012, 71% of the plasma line will be 3D (5 out of 7), while 37.5% of the LCD lineup will be 3D (3 out of 8).  Overall for 2012, 53% of Panasonic’s TV series’ will be 3D, all of which are high-end or mid-range (in fact, the only 2D TVs in the lineup appear to all be low-end).

            I looked on Samsung’s website, and they currently have 37 TVs listed, of which 14 of them are 3D (38%), and in 2012 half of their lineup will be 3D.  This sounds exactly like what Panasonic is doing.

            I’m sure if I were to go look at other top manufacturers, I would see the same story.  Manufacturers are phasing out 2D in favor of 3D.  As time goes by, I imagine this will get worse, and it won’t be long before 2D TVs are completely phased out.

            [quote=babgvant]

            It is not in the OEMs interest to push unpopular features, that’s not how markets work over time. If enough consumer demanded the absence of 3D, we would see it go away

            [/quote]

            Over the long term, you are correct.  But over the short term that is not correct.  When demand is low for a product, there are several different short term strategies to try to increase demand.  One way is to give the product to as many people as you can.  The more people that you give it to, the more chance there is that people will start using the product and find out that they actually want it….increasing demand.

            Consumer demand is currently low for 3D.  Intentionally replacing 2D TVs with 3D TVs is the best way to give the product away.  While demand will remain low in the short term, the demand may actually increase in the long term.  If it doesn’t, then you are correct that we will likely see a reversal of this trend, as this does not work in the long term.

            [quote=babgvant]In the CE marketplace, prices are consistent or falling year-over-year while the quality and feature count goes up. I fail to see how this is a problem.[/quote]

            You mean you fail to see how this is a problem as long as you support the features that are being added (3D/OTT), regardless of how other people feel about them.  But when other people want a feature that you don’t want (CableCARD), you cry foul.

            [quote=babgvant]3D support isn’t mandatory (or at least I missed the FCC docs on it)[/quote]

            Specific 3D format support in a 3D TV is required as part of the HDMI specification.  I used this example because you support 3D.  If you have a problem with things being mandatory, you should not like this, but I suspect you actually appreciate the HDMI specification making certain format support mandatory.

            [quote=babgvant]How I feel about mandatory ATSC vs. ATSC as a specification are totally unrelated.[/quote]

            ATSC is not mandatory due to a specification.  It is mandatory due to a rule issued by the FCC.  I used this example for that specific reason.  If you have a problem with things being mandatory, you should have a problem with this, but I suspect you do not.

            [quote=babgvant]Mandates aren’t bad per se; those that remove consumer choice, flexibility and freedom with no tangible gain are.[/quote]

            Let’s be clear here.  If the encryption was allowed, consumer choice and freedom would not be removed.  The cable company would give out a box so basic tier subscribers can receive the content they are paying for.  The box would likely be free to the customer (seeing as how this was the case in the CableVision exemption, where CableVision said they would give boxes away for free for up to 10 years).  The output from that box could then feed other equipment customers may have, be it a TV, a PC tuner, a Boxee Box, or whatever.  Customers would still have the freedom to choose what this device is.  Flexibility would be slightly impacted (an IR blaster or remote control might be necessary for control of the box), but the impact is minimal.  So overall, the impact to the basic tier subscribers would be minimal.  The only group of people that would be significantly impacted by this are people that do not pay for service but still receive the programming.  Obviously without a way to decrypt the signals, they lose access.

            The gain is not for the basic tier subscribers.  The gain would be the possible impact on the rest of the subscribers….the ones that already rent cable boxes.

            [quote=babgvant][quote=richard1980]ClearQAM tuners are widely available in the retail market even though they are virtually useless to most consumers.[/quote]Eh? I’d love to see numbers to back this up.[/quote]

            I assume you are not talking about ClearQAM tuners being widely available, because we both know that is very much true.  So if you are looking for number to support the rest of the statement, there are approximately 120-130 million households in the US, but only approximately 60 million of them subscribe to cable TV.  ClearQAM tuners are only usable by cable TV subscribers in areas that offer at least one unencrypted digital channel, which means that for analog only systems and systems with fully encrypted digital service, ClearQAM tuners cannot be used.  Of the 60 million cable TV subscribers, a number of them belong to analog-only networks or to CableVision in New York.  Therefore, at least 50% of consumers cannot use ClearQAM tuners because they either do not have cable TV service or if they do, they are not in an area that offers ClearQAM service.  Therefore, my statement that ClearQAM tuners are virutally useless to most consumers stands.

            [quote=babgvant][quote=richard1980]CableCARD tuners are scarcely available in the retail market even though the majority of consumers require them.[/quote]

            You need to heavily qualify this statement even approach validity.

            E.g.

            1) cable (i.e. there is a net loss to those w/o cable service, like OTA users and satellite subscribers) consumers

            2) could (i.e. this assumes that they wouldn’t rather have a DVR, like the 40% of households that currently have one) require them

            [/quote]

            Yes, you are correct.  Poor wording on my part.  CableCARD tuners are scarcely available in the retail market even though the majority of cable subscribers require them.

            It’s worth noting that when I say “CableCARD tuners … in the retail market”, I do not mean “CableCARD tuners … in TVs”.  I mean the full retail market.  TVs, basic receivers, DVRs, media centers/servers/players, etc.  As for the number of cable subscribers that require a CableCARD (whether standalone or in a cable company provided box), the NCTA says that as of 2010, there were 45.7 million digital video customers.  I could search for other sources of data, but I think it’s reasonable to assume that most of those subscribers are subscribing to more than just the basic tier, and with most cable companies encrypting the higher tiers, it’s reasonable to assume that most cable subscribers have at least one CableCARD.

            [quote=babgvant]That’s a fairly optimistic stance. I doubt that removing an option (ClearQAM) will net consumers more choices.[/quote]

            If you don’t like that stance, then consider this:  By encrypting the basic tier, ClearQAM tuners will become obsolete.  If they are obsolete, there’s no reason to build them into TVs.  If they aren’t being built into TVs, the TV manufacturers can use that money for other improvements to TVs.  Instead of most consumers paying for something they can’t use, perhaps that money can be used to benefit the majority of consumers.

            In any case, taking a chance that has the possibility of the desired outcome is the better choice when the end result of taking the chance and not getting the desired result is approximately the same as not taking the chance at all.

            [quote=babgvant]How does adding $2 to the monthly bill help basic cable subscribers who can currently get their full line-up by plugging my TV into the wall?[/quote]

            It won’t, and I’d like to be clear that I would not support any ruling that required the current basic tier subscribers to have to pay anything extra for a reasonable time to continue to receive their programming.  We should not punish current basic tier subscribers by making them pay more money each month.  Refer back to CableVision’s exemption, where they agreed to provide free boxes for up to 10 years.

          • richard1980 wrote:If $12 is

            [quote=richard1980]

            If $12 is so much of a burden on someone, perhaps they shouldn’t be buying a TV in the first place.

            [/quote]

            Wow, I am honestly shocked to see someone say that publicly.

            [quote=richard1980]

            A CE OEM only needs to modify the end-user hardware they are already building, but a cable company has to buy all new end-user hardware (which means the incur the full cost of the hardware, not just the difference between a ClearQAM tuner and a CableCARD tuner).  This alone puts more cost on the cable company than a CE OEM. 

            [/quote]

            Cable co’s buy the hardware from companies that specialize in building STBs, so they get to take advantage of the total market size not just the one delimited by their customer base.

            I also disagree that it is by definition cheaper to modify an existing piece of hardware than to build a new special purpose device. Speaking from personal experience; when it comes to software this is certainly not the case.

            [quote=richard1980]

            In addition to that, the cable company must also implement the required technology within their own system so that end-user hardware actually works, which costs even more money.  Plus they risk losing the revenue that they are already receiving from people that are renting STBs.

            [/quote]

            Shouldn’t they be doing that first part already, you know to make sure that it works with the CE’s kit?

            I don’t see how there’s risk in replacing someone’s STB. Is it your position that people might cancel cable if the MSO gives them a newer STB?

            [quote=richard1980]

            It’s actually related to the 3D aspect of our discussion.  It just goes to show that just because a product gets sold doesn’t mean there was ever actually a demand for that product.  There are millions upon millions of copies of WMC deployed.  Yet, demand has always been extremely low for it.

            [/quote]

            These applications are value-adds. They exist (shockingly enough) to add value to the base product. Once they exist it doesn’t cost $ to leave them (it would actually cost $ to take them out) so they stay. HW doesn’t work the same way as SW so it’s not completely valid to draw a parallel.

            [quote=richard1980]

            In 2010, Panasonic only launched two 3D TV series’ in the US…the GT and the VT series. 

            [/quote]

            To be more specific. Panasonic announced one 3D TV at CES (the VT25) then added the GT mid-year because of market conditions.

            [quote=richard1980]

            But in 2011, they launched even more.  In 2011, 60% of the plasma line was 3D (3 series’ out of 5 total), and 17% of Panasonic’s LCD TVs were 3D capable (1 out of 6).   Overall, only 36% of the 2011 lineup was 3D.  Upcoming for 2012, 71% of the plasma line will be 3D (5 out of 7), while 37.5% of the LCD lineup will be 3D (3 out of 8).  Overall for 2012, 53% of Panasonic’s TV series’ will be 3D, all of which are high-end or mid-range (in fact, the only 2D TVs in the lineup appear to all be low-end).

            [/quote]

            OK. I see this as an e.g. of the market working. This doesn’t mean that 2D is being phased out, but that 2D only displays are being phased out (something we can agree on). Obviously there’s demand, and it’s cheap enough to do; or they wouldn’t do it. If, as you claim, no one wants 3D there wouldn’t be an incentive to push it down the product line so quickly. It (like proper 24p support) would sit in the top-end for as long as OEMs could milk it.

            [quote=richard1980]

            Over the long term, you are correct.  But over the short term that is not correct.  When demand is low for a product, there are several different short term strategies to try to increase demand.  One way is to give the product to as many people as you can.  The more people that you give it to, the more chance there is that people will start using the product and find out that they actually want it….increasing demand.

            Consumer demand is currently low for 3D.  Intentionally replacing 2D TVs with 3D TVs is the best way to give the product away.  While demand will remain low in the short term, the demand may actually increase in the long term.  If it doesn’t, then you are correct that we will likely see a reversal of this trend, as this does not work in the long term.

            [/quote]

            We’ll have to wait and see. No one is forcing you to buy into the market right now, if you want to camp until the 3D craze has passed, feel free (just don’t expect it to be a short wait). I would love to see some numbers to back up your claims re. demand. Personally, I have a 3D set and it’s awesome. TBC, I bought it because it was the best 2D TV available at the time not because of 3D; it just turned out to be a very compelling feature. My kids love it too, they prefer to watch titles in 3D to 2D.

            Outside of my personal experience, I don’t find these claims to be anecdotally accurate either. It was clear at CES that the people there were quite fond of 3D (found this out the hard way while trying to walk through LG’s massive 3D demo).

            [quote=richard1980]

            You mean you fail to see how this is a problem as long as you support the features that are being added (3D/OTT), regardless of how other people feel about them.  But when other people want a feature that you don’t want (CableCARD), you cry foul.

            [/quote]

            If the next display I buy comes with CableCARD and it’s cheaper than the one it replaces, I won’t care. My issue is (and this really should be clear at this point) is with governmental mandates for highly specific features. If the market decides that CableCARD is the next best thing, more power to ’em.

            [quote=richard1980]

            Specific 3D format support in a 3D TV is required as part of the HDMI specification.  I used this example because you support 3D.  If you have a problem with things being mandatory, you should not like this, but I suspect you actually appreciate the HDMI specification making certain format support mandatory.

            [/quote]

            Seriously? You don’t see the difference b/w the government mandating something and a licensing body doing it for compatibility reasons? Besides, this “mandate” is only for HDMI 1.4 devices. It’s quite possible to manufacture a HDMI 1.3 device.

            If on the other hand the FCC made it mandatory for CE OEMs to license HDMI 1.4 in order to sell TVs in the States I would have an issue with that, but they aren’t doing that; so this is a farcical comparison.

            [quote=richard1980]

            ATSC is not mandatory due to a specification.  It is mandatory due to a rule issued by the FCC.  I used this example for that specific reason.  If you have a problem with things being mandatory, you should have a problem with this, but I suspect you do not.

            [/quote]

            Exactly, which is why I don’t understand why you ask about specifications (i.e. the documents that define how something works).

            [quote=richard1980]

            Let’s be clear here.  If the encryption was allowed, consumer choice and freedom would not be removed. 

            [/quote]

            Sure it would. I can’t use a ClearQAM tuner anymore. My TV’s tuner would be useless, as would the stack of PCI/PCIe QAM tuners I have in the closet. I wouldn’t be able to easily capture the content using multiple tuners on a single device anymore either.

            [quote=richard1980]

            The cable company would give out a box so basic tier subscribers can receive the content they are paying for. 

            [/quote]

            The box would pull electricity and be difficult to control. Both of these things are net harms.

            [quote=richard1980]

            The gain is not for the basic tier subscribers.  The gain would be the possible impact on the rest of the subscribers….the ones that already rent cable boxes.

            [/quote]

            Which gain is that again? The freedom to use a CableCARD based STB or 3rd party device? If so, that’s not a gain; it’s the current state of the world. Claiming that killing off ClearQAM will magically make devices rain down isn’t going to make it happen.

            [quote=richard1980]

            I assume you are not talking about ClearQAM tuners being widely available, because we both know that is very much true.  So if you are looking for number to support the rest of the statement, there are approximately 120-130 million households in the US, but only approximately 60 million of them subscribe to cable TV. 

            [/quote]

            Did you just state that only 50% of the household would even be able to use the feature you want everyone to pay for when they buy a TV?

            [quote=richard1980]

            Therefore, at least 50% of consumers cannot use ClearQAM tuners because they either do not have cable TV service or if they do, they are not in an area that offers ClearQAM service.  Therefore, my statement that ClearQAM tuners are virutally useless to most consumers stands.

            [/quote]

            Gotcha. So even if that # is 40 million, it’s not “most” because only a subset of the 50%. I see your point.

            Using the same logic wouldn’t CableCARD be “virtually useless to most consumers” too? Those with ClearQAM or a DTA would drop the potential user base below 50% of the households as well.

            [quote=richard1980]

            It’s worth noting that when I say “CableCARD tuners … in the retail market”, I do not mean “CableCARD tuners … in TVs”.  [/quote]

            I would love to see more CableCARD devices in the retail market as well, I just don’t think it should be forced on us by the gov’t. That said, given Moxi’s recent exit I doubt that will happen.

            [quote=richard1980]

            If you don’t like that stance, then consider this:  By encrypting the basic tier, ClearQAM tuners will become obsolete.  If they are obsolete, there’s no reason to build them into TVs.  If they aren’t being built into TVs, the TV manufacturers can use that money for other improvements to TVs.  Instead of most consumers paying for something they can’t use, perhaps that money can be used to benefit the majority of consumers.

            [/quote]

            The problem with this argument is that ATSC is still mandatory. Unless the CE OEMs are incredibly stupid, they use the same chip for both. Given the margins on these displays I doubt that they are.

            [quote=richard1980]

            Refer back to CableVision’s exemption, where they agreed to provide free boxes for up to 10 years.

            [/quote]

            What happens after 10 years?

          • babgvant wrote:

            Cable co’s

            [quote=babgvant]

            Cable co’s buy the hardware from companies that specialize in building STBs, so they get to take advantage of the total market size not just the one delimited by their customer base.

            I also disagree that it is by definition cheaper to modify an existing piece of hardware than to build a new special purpose device. Speaking from personal experience; when it comes to software this is certainly not the case.

            [/quote]

            So you think a CE manufacturer would spend more on just the CableCARD tuner than the cable company spends on an entire box that includes a CableCARD tuner plus many other components?  Doesn’t make much sense to me that more can cost less in this scenario.

            [quote=babgvant]

            Shouldn’t they be doing that first part already, you know to make sure that it works with the CE’s kit?

            I don’t see how there’s risk in replacing someone’s STB. Is it your position that people might cancel cable if the MSO gives them a newer STB?

            [/quote]

            You wanted to compare the costs between CE manufacturer and cable company…so I did.

            And no, I do not think people might cancel cable if the cable company would give them a newer box.  However, the old box and system (pre-CableCARD) would have been proprietary.  The new system (post-CableCARD) would allow the subscriber to cancel the cable box and buy their own box…reducing their cable bill a few dollars per month.  That’s lost revenue for the cable company.

            [quote=babgvant]

            If, as you claim, no one wants 3D

            [/quote]

            I didn’t say no one wants 3D.  I said there is low demand for it.  Obviously some people want it or there would be no demand, not low demand.

            [quote=babgvant]

            I would love to see some numbers to back up your claims re. demand.

            [/quote]

            Consumer polls.  From what I’ve read, the biggest reasons why people aren’t liking 3D are:  the requirement to wear glasses (understandable), the increased price (I don’t really see that, but OK), and lack of quality content (I can see that…as of last month there were only 89 total 3D Blu-ray titles available).  The issue with glasses and lack of content are easy enough to mitigate and will come in time.

            Another good source of information is to look at 3D Blu-ray disc sales.  After 1 year as a Blu-ray format, 3D Blu-ray disc sales were only at about 3.5 million, with approximately 50% of those being from a bundled package (presumably player+movie or display+movie).

            [quote=babgvant]

            TBC, I bought it because it was the best 2D TV available at the time not because of 3D

            [/quote]

            I think this is the case for most 3D TV purchases.  3D is just an extra feature, not the primary reason for the purchase.  This further supports my claim that there is low demand for 3D.

            [quote=babgvant]

            It was clear at CES that the people there were quite fond of 3D (found this out the hard way while trying to walk through LG’s massive 3D demo).

            [/quote]

            How many average consumers attend CES?  I’ve never been, so I don’t know.  But my guess is the crowd is mostly techies (not the average consumer, and therefore probably more interested in certain things than the average consumer would be).

            [quote=babgvant]

            Seriously? You don’t see the difference b/w the government mandating something and a licensing body doing it for compatibility reasons? Besides, this “mandate” is only for HDMI 1.4 devices. It’s quite possible to manufacture a HDMI 1.3 device.

            [/quote]

            You didn’t distinguish that when you initially said you had a problem with mandates.  I took that to mean you had an issue with mandates regardless of their source.

            Also, it is not possible to manufacture an HDMI 1.3 certified device.  HDMI certifications are granted based on the current version of the test spec at the time of testing.  So all HDMI certified 3D TVs manufactured today must comply with the 3D mandates specified in the HDMI 1.4a specification.

            [quote=babgvant]

            If on the other hand the FCC made it mandatory for CE OEMs to license HDMI 1.4 in order to sell TVs in the States I would have an issue with that, but they aren’t doing that; so this is a farcical comparison.

            [/quote]

            So are you confirming that you have an issue with the FCC mandating that all TVs that come with a tuner now have an ATSC tuner?

            [quote=babgvant]

            Sure it would. I can’t use a ClearQAM tuner anymore. My TV’s tuner would be useless, as would the stack of PCI/PCIe QAM tuners I have in the closet. I wouldn’t be able to easily capture the content using multiple tuners on a single device anymore either.

            [/quote]

            How exactly would your TV’s tuner become useless?  You can still use it as an OTA tuner.  And if you were using RF output from a box, the tuner could still tune the output channel.  In both cases, the tuner still functions, and in the 2nd case, you end up being able to receive the same channels.

            As for being able to easily capture the content using multiple tuners, you would just need multiple boxes and some IR blasters.  Just because it requires a bit of work to set up doesn’t mean it’s impossible.

            [quote=babgvant]

            The box would pull electricity and be difficult to control. Both of these things are net harms.

            [/quote]

            I didn’t say there would be absolutely no harm…only that it is minimal.  And the reduced fuel consumption and carbon emissions resulting from fewer truck rolls offset the electricity issue.  Bigger picture.

            [quote=babgvant]

            Which gain is that again? The freedom to use a CableCARD based STB or 3rd party device? If so, that’s not a gain; it’s the current state of the world. Claiming that killing off ClearQAM will magically make devices rain down isn’t going to make it happen.

            [/quote]

            The possible gain would be the introduction of more 3rd party retail devices, which is the FCC’s entire reason for the separable security order.  The rules as they are right now have not helped the FCC’s goal.  Changing the rules in a similar way as to how they were changed for CableVision has very little negative impact on the ClearQAM customers, but has the possibility of a large positive impact on the CableCARD market.

            [quote=babgvant]

            Did you just state that only 50% of the household would even be able to use the feature you want everyone to pay for when they buy a TV?

             

            Using the same logic wouldn’t CableCARD be “virtually useless to most consumers” too? Those with ClearQAM or a DTA would drop the potential user base below 50% of the households as well.

            [/quote]

            It’s the same thing whether we are talking about ClearQAM or CableCARD.  Both are technologies that less than 50% of consumers can actually use, so it’s a bit hypocritical to say it’s OK to build TVs with one but not the other.  Additionally, of the group of people that can use either technology, CableCARD is the more prevalent technology that is actually in use.

            [quote=babgvant]

            The problem with this argument is that ATSC is still mandatory. Unless the CE OEMs are incredibly stupid, they use the same chip for both. Given the margins on these displays I doubt that they are.

            [/quote]

            Somewhere in the supply chain, someone is paying something to add QAM demodulation technology to the tuners (ATSC uses 8VSB modulation instead of QAM).

            [quote=babgvant]

            What happens after 10 years?

            [/quote]

            Since it hasn’t been 10 years yet, it’s impossible to answer accurately, but I would guess that the customers would have to pay for a box if they wanted a box.  But who knows what could happen to the customers or the market in a 10 year period?  10 years from now, we might all have AllVid gateways.

          • richard1980 wrote:So you

            [quote=richard1980]

            So you think a CE manufacturer would spend more on just the CableCARD tuner than the cable company spends on an entire box that includes a CableCARD tuner plus many other components?  Doesn’t make much sense to me that more can cost less in this scenario.

            [/quote]

            1) Economies of scale have an impact

            2) It’s not just the hardware, implementation (SW, expertise, etc)

            3) Depending on what’s in the box already (i.e. does it have a CPU capable of handling DRI), it could take almost everything but the shell to get to the same point

            Ultimately, we don’t know either way.

            [quote=richard1980]

            You wanted to compare the costs between CE manufacturer and cable company…so I did.

            [/quote]

            But this aspect of the cost is constant no matter what. In either scenario MSOs have to do the backend work to support CableCARD.

            [quote=richard1980]

            And no, I do not think people might cancel cable if the cable company would give them a newer box.  However, the old box and system (pre-CableCARD) would have been proprietary.  The new system (post-CableCARD) would allow the subscriber to cancel the cable box and buy their own box…reducing their cable bill a few dollars per month.  That’s lost revenue for the cable company.

            [/quote]

            That risk is no different than before MSOs had to eat their own dog food. As soon as CableCARD existed this was a potential outcome.

            [quote=richard1980]

            as of last month there were only 89 total 3D Blu-ray titles available). 

            Another good source of information is to look at 3D Blu-ray disc sales.  After 1 year as a Blu-ray format, 3D Blu-ray disc sales were only at about 3.5 million, with approximately 50% of those being from a bundled package (presumably player+movie or display+movie).

            [/quote]

            So w/ 89 titles (most of them crap) sold 3.5 million units? That seems pretty good all things considered.

            [quote=richard1980]

            I think this is the case for most 3D TV purchases.  3D is just an extra feature, not the primary reason for the purchase.  This further supports my claim that there is low demand for 3D.

            [/quote]

            It’s important to note that I bought it in May of 2010. I wouldn’t buy another TV that didn’t have 3D now.

            [quote=richard1980]

            How many average consumers attend CES?  I’ve never been, so I don’t know.  But my guess is the crowd is mostly techies (not the average consumer, and therefore probably more interested in certain things than the average consumer would be).

            [/quote]

            I thought that too before I went. It’s primarily a trade show, so most of the people are there as part of their job (buyers, supply chain, etc).

            [quote=richard1980]

            You didn’t distinguish that when you initially said you had a problem with mandates.  I took that to mean you had an issue with mandates regardless of their source.

            [/quote]

            Looking back, our discussion was set in the context of making CableCARD mandatory like ATSC. As this is a government mandate, I expected that my comments on the subject would be interpreted contextually. Apologies.

            [quote=richard1980]

            Also, it is not possible to manufacture an HDMI 1.3 certified device.  HDMI certifications are granted based on the current version of the test spec at the time of testing.  So all HDMI certified 3D TVs manufactured today must comply with the 3D mandates specified in the HDMI 1.4a specification.

            [/quote]

            As well they should. So you’re saying that HDMI 1.4 compatibility is a requirement for 2D only TVs even if they don’t include features like ARC?

            [quote=richard1980]

            So are you confirming that you have an issue with the FCC mandating that all TVs that come with a tuner now have an ATSC tuner?

            [/quote]

            No. ATSC is the standard we use for broadcast TV. I think it’s reasonable to expect that anything sold as a TV would work with that system.

            I do think it’s questionable that QAM is mandated, but I can see the reasoning behind it. This is moot though because now that it’s there, rendering the feature that we were all forced to pay for useless would be a unreasonable taking.

            Personally, I wish that we could just buy displays at retail. I have no use for the ATSC/QAM tuners in my TV, but that said I suspect there aren’t currently economies of scale that support that preference from a business perspective.

            [quote=richard1980]

            How exactly would your TV’s tuner become useless?  You can still use it as an OTA tuner.  And if you were using RF output from a box, the tuner could still tune the output channel.  In both cases, the tuner still functions, and in the 2nd case, you end up being able to receive the same channels.

            [/quote]

            The QAM tuner that I paid for would no longer have function; rendering it useless.

            If you’re proposing that the STB box that was provided would emulate ClearQAM in my house and that the change would be transparent to all of the devices in it, I could get on board with that.

            [quote=richard1980]

            As for being able to easily capture the content using multiple tuners, you would just need multiple boxes and some IR blasters.  Just because it requires a bit of work to set up doesn’t mean it’s impossible.

            [/quote]

            “Impossible” isn’t the right standard.

            [quote=richard1980]

            I didn’t say there would be absolutely no harm…only that it is minimal.  And the reduced fuel consumption and carbon emissions resulting from fewer truck rolls offset the electricity issue.  Bigger picture.

            [/quote]

            1) I doubt that the reduction in truck rolls would offset the increased electricity consumption of the boxes deployed – bigger picture.

            2) More importantly, we’ve shifted the cost from the MSO for figuring out their business to their customer

            [quote=richard1980]

            The possible gain would be the introduction of more 3rd party retail devices, which is the FCC’s entire reason for the separable security order.

            [/quote]

            So we should disenfranchise ClearQAM users for the [unlikely] potential for more 3rd party retail devices?

            [quote=richard1980]

            The rules as they are right now have not helped the FCC’s goal. 

            [/quote]

            It’s probably important to think about why, at the root, this is true instead of shooting blindly in the dark and hoping.

            [quote=richard1980]

            It’s the same thing whether we are talking about ClearQAM or CableCARD.  Both are technologies that less than 50% of consumers can actually use, so it’s a bit hypocritical to say it’s OK to build TVs with one but not the other. 

            [/quote]

            See previous statements regarding ClearQAM mandate.

            [quote=richard1980]

            Additionally, of the group of people that can use either technology, CableCARD is the more prevalent technology that is actually in use.

            [/quote]

            This is only true because MSOs have to use it.

            [quote=richard1980]

            Somewhere in the supply chain, someone is paying something to add QAM demodulation technology to the tuners (ATSC uses 8VSB modulation instead of QAM).

            [/quote]

            It would cost $ to redesign the chips, it would cost $ to revalidate the devices that use them.

            [quote=richard1980]

            I would guess that the customers would have to pay for a box if they wanted a box. 

            [/quote]

            Exactly.

          • babgvant wrote:

            So w/ 89

            [quote=babgvant]

            So w/ 89 titles (most of them crap) sold 3.5 million units? That seems pretty good all things considered.

            [/quote]

            There were something like 1.7 million units sold as a result of being in a bundled package, meaning only about 1.8 million stand-alone movies were sold.  Even in a best case scenario, the repeat buy rate is very low (an average of about 1 repeat buy per person, assuming the only people that could buy a 3D movie are those that purchased a bundle, and if you factor in the fact that other people could buy a 3D movie without buying a bundle, it gets even worse).  We must assume that the number of purchases per person is not equal for everyone (some people more 3D movies than others), so it stands to reason that many of the people that bought a piece of 3D hardware never bought a stand-alone 3D movie.

            [quote=babgvant]

            As well they should. So you’re saying that HDMI 1.4 compatibility is a requirement for 2D only TVs even if they don’t include features like ARC?

            [/quote]

            The HDMI specification does not make every feature mandatory.  However, it does make it mandatory to comply with the specification if a certain feature from the specification is implemented.  So for example, a TV with ARC and a TV without ARC can both be compliant with the HDMI spec (because ARC is not a mandatory feature).  However, for the TV to feature ARC, it must implement ARC IAW the ARC portion of the current HDMI specification.

            [quote=babgvant]

            No. ATSC is the standard we use for broadcast TV. I think it’s reasonable to expect that anything sold as a TV would work with that system.

            I do think it’s questionable that QAM is mandated

            [/quote]

            QAM (as a technology) is not mandated by law…only by specification (I can’t remember exactly what it is, but there’s some agreement between all the cable companies that they will all use QAM).  Additionally, there is no mandate requiring a TV be built with a ClearQAM tuner (from what I’ve read, there are actually TVs that do not come with ClearQAM tuners, although I’ve never seen one with my own eyes).

            [quote=babgvant]

            This is moot though because now that it’s there, rendering the feature that we were all forced to pay for useless would be a unreasonable taking.

            [/quote]

            IMO, when cable companies started encrypting their content, ClearQAM tuners became useless.  While they do work 100% for people that only subscribe to the basic tier, customers that subscribe to any higher tiers in an encrypted cable system (most cable customers) are not able to enjoy the full benefit of their cable subscription with a ClearQAM tuner.

            [quote=babgvant]

            If you’re proposing that the STB box that was provided would emulate ClearQAM in my house and that the change would be transparent to all of the devices in it, I could get on board with that.

            [/quote]

            It wouldn’t be 100% transparent, as you’d still need IR blasters, plus you’d need a box per tuner (dual tuner cards with only one coax connector and an internal splitter would only work as a single tuner).  But overall, the end result would be mostly transparent.  You’d still get the same channels, in the same quality, using your current hardware.  The only change would be the inclusion of additional tuning boxes and the IR blasters.

            That said, I believe in the CableVision ruling there were limits to how many boxes a person could get for free (I believe the limit was two).  I disagree with this aspect of the ruling because I feel the change should be as transparent as possible to the end user.  I would prefer to see one free box per piece of customer owned hardware.  If you’ve got 2 devices, you get 2 free boxes…but if you’ve got 20 devices, you get 20 free boxes.

            [quote=babgvant]

            1) I doubt that the reduction in truck rolls would offset the increased electricity consumption of the boxes deployed – bigger picture.

            2) More importantly, we’ve shifted the cost from the MSO for figuring out their business to their customer

            [/quote]

            1.  Considering that the article you linked suggests that HD boxes only consume about $20-ish per year in electricity, I find it hard to believe that it costs more to run the boxes than it does to drive around disconnecting lines and installing filters.

            2.  Customers are paying for it right now anyway.  Customers pay the cable company, the cable company uses some of the customer’s money to buy gasoline.

            [quote=babgvant]

            So we should disenfranchise ClearQAM users for the [unlikely] potential for more 3rd party retail devices?

            [/quote]

            IMO?  They shouldn’t even be around today.  I’ve already pointed out that I disagree with banning the cable companies from encrypting their signals.  I believe the cable companies should have been allowed to encrypt from day 1.  If they had been allowed to do that back when all this first started, I have no doubt in my mind that ClearQAM tuners would be absent from every TV in the US market today.

            [quote=babgvant]

            It’s probably important to think about why, at the root, this is true instead of shooting blindly in the dark and hoping.

            [/quote]

            We both agree that this entire situation has been handled incorrectly from the beginning.  However, neither of us can force the FCC to consider other options.  The only thing we can really do is respond to the options we are presented.

            [quote=babgvant]

            This is only true because MSOs have to use it.

            [/quote]

            What does that have to do with anything?  It’s still the dominant technology in the cable TV sector.

            [quote=babgvant]

            It would cost $ to redesign the chips, it would cost $ to revalidate the devices that use them.

            [/quote]

            New models don’t ever get designed/produced?

          • richard1980 wrote:There were

            [quote=richard1980]

            There were something like 1.7 million units sold as a result of being in a bundled package, meaning only about 1.8 million stand-alone movies were sold.

            [/quote]

            Seeing how many of the good titles are still (WTF!) locked up in exclusive deals, I still think those are pretty good numbers all things considered.

            [quote=richard1980]

            QAM (as a technology) is not mandated by law…only by specification (I can’t remember exactly what it is, but there’s some agreement between all the cable companies that they will all use QAM).  Additionally, there is no mandate requiring a TV be built with a ClearQAM tuner (from what I’ve read, there are actually TVs that do not come with ClearQAM tuners, although I’ve never seen one with my own eyes).[/quote]

            Interesting, [obviously] I was under the impression that it was not optional for TV OEMs. If it’s not mandated, then it must be there due to customer demand.

            [quote=richard1980]

            IMO, when cable companies started encrypting their content, ClearQAM tuners became useless.  [/quote]

            You’re not alone 🙂

            [quote=richard1980]

            It wouldn’t be 100% transparent, as you’d still need IR blasters, plus you’d need a box per tuner (dual tuner cards with only one coax connector and an internal splitter would only work as a single tuner).  But overall, the end result would be mostly transparent.  You’d still get the same channels, in the same quality, using your current hardware.  The only change would be the inclusion of additional tuning boxes and the IR blasters.

            [/quote]

            Only change? That’s  pretty big [sucky, harmful] change.

            [quote=richard1980]

            1.  Considering that the article you linked suggests that HD boxes only consume about $20-ish per year in electricity, I find it hard to believe that it costs more to run the boxes than it does to drive around disconnecting lines and installing filters.

            [/quote]

            $20/box.

            How does the box get to your house? Either you pick it up (using gas) or it is delivered (using gas); how is that fundamentally different from the cable truck (using gas) coming to your house? There is a net loss here.

            [quote=richard1980]

            2.  Customers are paying for it right now anyway.  Customers pay the cable company, the cable company uses some of the customer’s money to buy gasoline.

            [/quote]

            True, but they will pay more under this scheme unless the MSO reduces their bill accordingly.

            [quote=richard1980]

            IMO?  They shouldn’t even be around today. 

            [/quote]

            But it is. And that’s an important thing to remember.

            [quote=richard1980]

            We both agree that this entire situation has been handled incorrectly from the beginning.  However, neither of us can force the FCC to consider other options.  The only thing we can really do is respond to the options we are presented.

            [/quote]

            I see this as more of the same crap that got us here.

            [quote=richard1980]

            What does that have to do with anything?  It’s still the dominant technology in the cable TV sector.

            [/quote]

            The why matters.

            [quote=richard1980]

            New models don’t ever get designed/produced?

            [/quote]

            Of course, but much of the existing design is reused in new models. There’s no point in recreating stuff that works; it would be too costly.

            Obviously, if we’re talking about a significant cost it makes sense to revisit if demand changes – I suspect in this situation, that’s not the case.

          • Quote:

            Interesting,

            [quote]

            Interesting, [obviously] I was under the impression that it was not optional for TV OEMs. If it’s not mandated, then it must be there due to customer demand.

            [/quote]

            I found it…SCTE mandates the modulation techniques in ANSI/SCTE 07 2000:  Digital Video Transmission Standard for Cable Television.  It is my understanding that only SCTE members are bound by this specification, although I guess anyone is free to implement it.

            And I honestly don’t think ClearQAM tuners are built into TVs due to consumer demand.  I think the entire reason why ClearQAM tuners were included was as a selling point to consumers…”this TV works with your cable system”, which may have been a good selling point at one time, but is no longer so (obviously because so much content is encrypted).  I also believe that in today’s market, ClearQAM tuners are “good enough” in the eyes of the TV manufacturers.  Take away ClearQAM channels, and all of a sudden the TVs no longer work with the cable system.  That will force the TV manufacturers to come up with a different way to make TVs work with the cable system (which means they would have to implement CableCARD tuners) if they wish to continue to try to use the cable TV system as a selling point.  Of course, they could abandon the concept of connecting to the cable system, but even if they do that we wouldn’t be much worse off than we  are now….assuming of course the encryption authorization included the appropriate stipulations about free boxes and such.

            [quote=babgvant]

            How does the box get to your house? Either you pick it up (using gas) or it is delivered (using gas); how is that fundamentally different from the cable truck (using gas) coming to your house? There is a net loss here.

            [/quote]

            If the box is delivered via USPS, the extra gas is hardly enough to use as an argument.  They are already coming to your house anyway to deliver your other mail, and the box impacts USPS’s fuel consumption very little.  FedEx, UPS, and other similar services would likely consume more fuel that USPS, but still not as much as a cable company technician.  Additionally, the biggest fuel savings would come from disconnects, not new installs.  Someone pushes a button in an office, and all of a sudden your service is disconnected.  No need to drive out and disconnect the cable.  How many cable technicians are out every day disconnecting lines?  I’m going to embarrass myself, but it wasn’t long ago that I got my service disconnected.  I had auto-pay set up, and stupid me set it up with my debit card.  Debit card expired, and a couple of months later I had quite the large balance…which wasn’t getting paid.  I came home one day and found my cable service had been disconnected.  I called and straightened that out, but they couldn’t reconnect my service right away.  Why?  Because in addition to shutting off the cable box I had at the time, the came out and physically disconnected the line.  So they had to come out and re-connect it, which of course took a while (several days IIRC).  So in summary, I think there are quite a large number of trucks rolling around checking lines and disconnecting them.  I can see how a large amount of fuel could be saved by not having to do that.

            [quote=babgvant]

            True, but they will pay more under this scheme unless the MSO reduces their bill accordingly.

            [/quote]

            How would consumers be paying more?  Assuming the boxes were free (and presumably the installation as well, if self install is not allowed), they’d be paying the same amount.  The cable company would just be keeping more of the money from the big pile.

            [quote=babgvant]

            I see this as more of the same crap that got us here.

            [/quote]

            I’d be happy to join you in petitioning the FCC to do things a different way.  But until they decide to listen, we take what we can get.

          • richard1980 wrote:And I

            [quote=richard1980]

            And I honestly don’t think ClearQAM tuners are built into TVs due to consumer demand.  I think the entire reason why ClearQAM tuners were included was as a selling point to consumers…

            [/quote]

            That’s pretty close to the definition of demand.

            [quote=richard1980]

            If the box is delivered via USPS, the extra gas is hardly enough to use as an argument.  They are already coming to your house anyway to deliver your other mail, and the box impacts USPS’s fuel consumption very little.  FedEx, UPS, and other similar services would likely consume more fuel that USPS, but still not as much as a cable company technician. 

            [/quote]

            Why is that? UPS and Fedex do have advanced logistics programs that map these sorts of things, but I’d assume that the MSOs have something similar. Either way there’s a truck driving to your house (in the case of UPS/Fedex it’s quite a bit bigger too).

            As far as the USPS goes, it depends on how it works where you live. When I lived in Chicago, there was a separate truck that drove around with packages like UPS/Fedex does.

            [quote=richard1980]

            Additionally, the biggest fuel savings would come from disconnects, not new installs.  Someone pushes a button in an office, and all of a sudden your service is disconnected.  No need to drive out and disconnect the cable.

            [/quote]

            And how does the box get back to the MSO?

            [quote=richard1980]

            How would consumers be paying more?  Assuming the boxes were free (and presumably the installation as well, if self install is not allowed), they’d be paying the same amount.  The cable company would just be keeping more of the money from the big pile.

            [/quote]

            Bill + $20 in electricity x box > Bill

          • babgvant wrote:

            That’s

            [quote=babgvant]

            That’s pretty close to the definition of demand.

            [/quote]

            I think the definition of demand is more along the lines of consumers saying “I want this” rather than manufacturers saying “look what this can do”.

            [quote=babgvant]

            Why is that? UPS and Fedex do have advanced logistics programs that map these sorts of things, but I’d assume that the MSOs have something similar. Either way there’s a truck driving to your house (in the case of UPS/Fedex it’s quite a bit bigger too).

            As far as the USPS goes, it depends on how it works where you live. When I lived in Chicago, there was a separate truck that drove around with packages like UPS/Fedex does.

            [/quote]

            In one way, there’s a truck driving to your house.  In the other way, there’s a truck driving to your house and another truck driving to your neighbor’s house to deliver a package.

            [quote=babgvant]

            And how does the box get back to the MSO?

            [/quote]

            Who says the box has to go back to the MSO?  I remember when I turned in my cable box I was given another option…pay for the box.

            [quote=babgvant]

            Bill + $20 in electricity x box > Bill

            [/quote]

            Point taken.  Although I do believe that cable rates are regulated, and so the next time rates go up, they likely won’t go up as much due to decreased expenses.

          • richard1980 wrote:I think the

            [quote=richard1980]

            I think the definition of demand is more along the lines of consumers saying “I want this” rather than manufacturers saying “look what this can do”.

            [/quote]

            Demand is expressed in imperfect ways since it’s difficult for OEMs to obtain adequate feedback. This is why they depend on focus groups and analysts to provide a sampling of what demand might be.

            [quote=richard1980]

            In one way, there’s a truck driving to your house.  In the other way, there’s a truck driving to your house and another truck driving to your neighbor’s house to deliver a package.

            [/quote]

            Eh? I’d be shocked if these sorts of things weren’t batched by the MSO just like delivery is batched by UPS/FedEx. If it’s not then that’s just bad design.

            [quote=richard1980]

            Who says the box has to go back to the MSO?  I remember when I turned in my cable box I was given another option…pay for the box.

            [/quote]

            Comcast wanted me to pay $60 for a DTA. That’s hardly a good option, especially since the box doesn’t do you any good if you don’t have cable.

          • Quote:

            Eh? I’d be shocked if

            [quote]

            Eh? I’d be shocked if these sorts of things weren’t batched by the MSO just like delivery is batched by UPS/FedEx. If it’s not then that’s just bad design.

            [/quote]

            I need to be more clear.  In one way, there is a USPS/FedEx/UPS truck driving to your house to deliver your box.  At the same time, the driver delivers a box to your neighbor.  In the other way, there is a cable company truck driving to your house to deliver your box.  A 2nd truck (USPS/FedEx/UPS) drives to your neighbor’s house to deliver a package.  2 trucks > 1 truck.  Even if the FedEx/UPS driver wasn’t delivering a package for your neighbor, it’s reasonable to assume they were at least in the area delivering to someone else.

            [quote=babgvant]

            Comcast wanted me to pay $60 for a DTA. That’s hardly a good option, especially since the box doesn’t do you any good if you don’t have cable.

            [/quote]

            While it’s not a good option for the customer, it does mitigate any fuel costs.  However, if a box were going back to the MSO, it could be sent back the same way it was delivered.

            I wonder how many people actually return the box though?  I suspect there are probably a significant number of service cancellations due to non-payment, and I would think that a lot of those boxes would never get collected.

            Of course, another thing to look at…encryption means no trucks rolling around disconnecting unauthorized users.

  • Competition?  In America?  We

    Competition?  In America?  We must put a stop to that.  Call the lobbyists!!!

    How exactly does encrypting all the channels, including the ones you can get OTA for free, spur innovation and add consumer choice?  I see how NOT encrypting them would do that, but I fail to see how the reverse would be true.

    You nearly made the very point you were arguing against when you noted how few CC products exist.  If that’s how you get access to the encrypted streams and there are few products out there to do so, doesn’t it stand to reason that innovation and choice is being LIMITED because of it?

    • The entire purpose of

      The entire purpose of CableCARD is to give companies the ability to develop products that can receive and display the encrypted content from the cable company.  Essentially, it gives companies the ability to compete with the cable companies and their set top boxes.  However, very few products exist that can compete with the cable box.  Sure, TiVo has their line of products, and recently we’ve seen the introduction of several new CableCARD tuners for HTPCs, but overall there’s not much choice when it comes to buying products that will allow you to watch your cable channels.  The average consumer doesn’t even know about Windows Media Center, much less that you can buy a CableCARD tuner and ditch the cable box.  TiVo is a well known brand, but TiVo’s business model prevents them from really taking off.  As a result, the current CableCARD market is dominated by cable boxes.  I wouldn’t call our current market very competitive.

      So what do we see in the retail market right now?  We see most tuning products today with only ATSC/ClearQAM tuners.  Changing the rules spurs innovation because it basically makes the ClearQAM tuner obsolete and forces companies that want to develop products that can receive cable TV signals to embrace CableCARD instead of shunning it.  Right now there’s very little motivation for a company to develop a retail product that includes a CableCARD slot, and that lack of motivation has translated into a lack of CableCARD slots in retail products.  Give these companies a little motivation, and perhaps they will become more innovative and give us products that actually include CableCARD slots so the majority of the market isn’t dominated by the cable companies.

  • I can understand the

    I can understand the motivation for cable companies wanting to encrypt the basic programming. There is no way for them to block broadband-only subscribers from getting the programs for “free” like they were able in the analog days by placing a filter on the line.

    Of course, arguments can be made about the channels being “freely available” OTA, but then that also neglects the value that cable does bring in many instances. Depending on area and market, some antenna installations can be more costly and complex than others compared to utilizing an existing cable hookup.

    • Aaron Ledger wrote:I can

      [quote=Aaron Ledger]

      I can understand the motivation for cable companies wanting to encrypt the basic programming. There is no way for them to block broadband-only subscribers from getting the programs for “free” like they were able in the analog days by placing a filter on the line.

      [/quote]

      I think we all understand their motivation.  Control.  Monopolies.  Competition.  However, note that they can’t block local channels using any method because they are currently required to keep them unencrypted.  This is what the cable companies are trying to end.

      [quote=Aaron Ledger]

      Of course, arguments can be made about the channels being “freely available” OTA, but then that also neglects the value that cable does bring in many instances. Depending on area and market, some antenna installations can be more costly and complex than others compared to utilizing an existing cable hookup.

      [/quote]

      You’re correct, but this doesn’t address the core of the debate here, though.  What’s being talked about is whether or not encrypting all the channels is going to help or hurt innovation and consumer choice.

      • skirge01 wrote:I think we all

        [quote=skirge01]

        I think we all understand their motivation.  Control.  Monopolies.  Competition.  However, note that they can’t block local channels using any method because they are currently required to keep them unencrypted.  This is what the cable companies are trying to end.

        [/quote]

        I think they are simply businesses with an existing investment in infrastructure and franchise agreements that are logically trying to maximize. There’s no business I know of that gives product away and makes money on it so should we expect the cable companies to do so or not try to stop it?

        [quote=skirge01]

        You’re correct, but this doesn’t address the core of the debate here, though.  What’s being talked about is whether or not encrypting all the channels is going to help or hurt innovation and consumer choice.

        [/quote]

        Certainly debatable. I think the core of the reasoning is best said as attempting to stop theft of service instead of consumer choice and innovation.

        • Aaron Ledger wrote:I think

          [quote=Aaron Ledger]

          I think they are simply businesses with an existing investment in infrastructure and franchise agreements that are logically trying to maximize. There’s no business I know of that gives product away and makes money on it so should we expect the cable companies to do so or not try to stop it?

          [/quote]

          There are many e.g. of businesses that give product away and still make money. Even when it comes to physical goods (i.e. marketing departments do this quite often), but obviously much more common when it comes to non-rivalrous goods like music; where there is a strong (and growing) history of using a non-rivalrous good to sell rivalrous good by giving the first one away.

          I can see the argument that the MSOs are trying to maximize profit; and I agree that in our society that is generally acceptable. This is obviously more complex than most markets though because of the natural (at one time anyway) monopoly granted to MSOs. We have no obligation to bend over to support a business model, just as they can lobby the FCC to change the rules I think there is significant legitimacy around companies like Boxee pointing out the state of the emperor’s attire.

          [quote=Aaron Ledger]

          Certainly debatable. I think the core of the reasoning is best said as attempting to stop theft of service instead of consumer choice and innovation.

          [/quote]

          I think you’re being overly generous, but either way we should be asking which is more harmful instead of crying “theft”. Create a tangible metric for how much theft of service costs MSOs (and I mean a real # here, not the BS that is often thrown around by many copyright holders) and weigh it against the loss to consumers. A hard metric would be the diminished value of their CE kit, lost flexibility, increase consumer outlay to replace the functionality taken away, lost profits to Boxee, etc. but ideally it would also include something around the lost potential for new competitive devices which have been kneecapped.

        • Aaron Ledger wrote:I think

          [quote=Aaron Ledger]

          I think they are simply businesses with an existing investment in infrastructure and franchise agreements that are logically trying to maximize. There’s no business I know of that gives product away and makes money on it so should we expect the cable companies to do so or not try to stop it?

          [/quote]

          Ever heard of Google?  I’ve never paid Google a dime, yet I use many of their products every single day.

          [quote=Aaron Ledger]

          Certainly debatable. I think the core of the reasoning is best said as attempting to stop theft of service instead of consumer choice and innovation.

          [/quote]

          I read the entire submission from the NCTA and they do talk at length about theft of service.  However, they don’t mention that they could use alternate means to prevent theft.  Granted, it might cost them some money to implement, but they don’t want to do that.  At the same time, they tell Boxee that they could simply implement Cablecard on their product, conveniently omitting the fact that would cost Boxee quite a bit of money and–ever so conveniently–the cable industry would be the recipient of all that money.

          The NCTA even goes so far as to say how successful CC is, yet the FCC themselves said it was an abject failure and propsed AllVid to replace it.  They stated that CC was supported in a wide range of devices, including Tivo and CC PC’s.  Their definition of “wide range” is quite a departure from my own, since the two things they listed are the ONLY ones I’m aware of (Ceton, SiliconDust/Hauppauge, and Tivo).  That’s like saying you have a multitude of options when shopping for a car, only to find that your only options are a Focus, Fusion, or Fiesta. 

          The NCTA also talks quite a bit about how much more convenient a “truckless” service connection/disconnection is for the consumer and how much money they (the cable company) would save.  They fail to mention that they would charge people the shipping costs to mail the devices out and people would still need to return the equipment or face additional charges.  They even mention how much money they would save by cutting theft, which would obviously benefit the consumer… yet, has anyone, in the history of cable television, ever seen their bill go DOWN as a result of the money the cable company is saving?

          In the end, all I see from the NCTA is an identical move the RIAA and MPAA tried, when they attempted to keep the stranglehold on their monopolistic business models.  I don’t see a single, tangible piece of evidence that supports the claim that this change would benefit the consumer.

          • skirge01 wrote:Ever heard of

            [quote=skirge01]

            Ever heard of Google?  I’ve never paid Google a dime, yet I use many of their products every single day.

            [/quote]

            What is Google? Seriously, you do “pay” for Google, it just so happens that it is an indirect payment by viewing personalized advertising and purchasing products sold via the advertising.

          • Aaron Ledger wrote:skirge01

            [quote=Aaron Ledger]

            [quote=skirge01]

            Ever heard of Google?  I’ve never paid Google a dime, yet I use many of their products every single day.

            [/quote]

            What is Google? Seriously, you do “pay” for Google, it just so happens that it is an indirect payment by viewing personalized advertising and purchasing products sold via the advertising.

            [/quote]

            Looks like this thread went hog wild over the weekend!  As far as this goes, however, the statement was:

            [quote=Aaron Ledger]There’s no business I know of that gives product away and makes money on it…[/quote]

            Google does, in fact, give their product away AND make money on it.  Now, one could argue that tracking a user’s online browsing and/or email content is “charging” the user, but a reasonable person would not consider that to be a true “cost”.  In most people’s minds, cost = actual money or some sort of hardship.  The majority of online users have stated (through complacency) that they are just fine with having some portion of their online activities tracked as a consequence of using the internet.

          • Besides the cost of viewing

            Besides the cost of viewing an ad (time of viewing ad = money), the cost you are neglecting is that Google gets direct payment from advertisers who sell products to users of Google services. The people who purchase those products are indirectly paying Google.

          • Aaron Ledger wrote:Besides

            [quote=Aaron Ledger]

            Besides the cost of viewing an ad (time of viewing ad = money), the cost you are neglecting is that Google gets direct payment from advertisers who sell products to users of Google services. The people who purchase those products are indirectly paying Google.

            [/quote]

            I don’t watch ads, so that’s costing me nothing.  If an ad stops me from seeing something, it’s not worth seeing at all.  Honestly, I’m numb to ads on websites I don’t use ABP and NS on (such as MR).  As far as someone else paying Google, I couldn’t care less.  That’s not coming out of my pocket, so, it’s still free.  The fact that Google was able to come up with a business model that costs me nothing, yet still allows them to make money from someone else would seem to indicate that it IS possible to give something away AND make money, which is what you said couldn’t be done.

            The sad part about this is that it’s the same model TV was originally founded upon.  Commercials were supposed to keep TV free.  It would seem that somewhere along the way, the content providers and stations forgot how to make that model continue to be profitable.

          • Everyone I talk to about

            Everyone I talk to about advertising tells me they are unaffected by it (and I used to feel the same way myself). I guess companies spending all those billions on advertising are flushing  money down the toilet…

            I guess if you’ve never bought a product from a company that also utilizes Google ads then you can say it is free for you. I find that it would be virtually impossible for any Missing Remote readers to have never bought anything from any company that utilizes Google ads. I have personally seen ads from many companies that I recognize and have done business with such as Newegg, Tiger Direct, Expedia, Comcast, Intuit, etc.

          • Aaron Ledger wrote:Everyone I

            [quote=Aaron Ledger]

            Everyone I talk to about advertising tells me they are unaffected by it (and I used to feel the same way myself). I guess companies spending all those billions on advertising are flushing  money down the toilet…

            I guess if you’ve never bought a product from a company that also utilizes Google ads then you can say it is free for you. I find that it would be virtually impossible for any Missing Remote readers to have never bought anything from any company that utilizes Google ads. I have personally seen ads from many companies that I recognize and have done business with such as Newegg, Tiger Direct, Expedia, Comcast, Intuit, etc.

            [/quote]

            I do understand what you’re saying, but I don’t agree.  I’ll use Google’s shopping search to find prices for things I’m looking for.  That costs me nothing to do.  I didn’t lose time, since I would have been searching for prices somewhere, anyway.  Google didn’t charge me for the search or the results.  The company I bought from built advertising into their price, so I paid THEM…not Google.  If someone went to that same company’s website because I told them about their great prices and service, part of that person’s money is also going to fund their advertising campaign, which probably still includes Google, yet that person never used Google to make their purchase.  I fail to see how that person could be seen as “paying” Google.

            By your definition, I’d be paying AT&T for my use of Microsoft Security Essentials.  I pay for Cablevision’s internet service, which uses AT&T’s backbone, to download MSE.  Again, I just don’t see it that way.

          • You are paying Microsoft for

            You are paying Microsoft for Security Essentials by purchasing Windows.

            We’ll just have to agree to disagree 🙂

  • Rather than talk cost and

    Rather than talk cost and whatnot, what about looking at this from a different perspective?  What was the intended purpose off requiring the cable companies NOT to encrypt the local channels?  Is that purpose still necessary?  If so, is it still met if these signals are encrypted?

    I did try and find the original purpose, but came up empty.  Even the Comm Act of 1934 didn’t seem to answer this question.  In most documents, there were plenty of references to “mandatory” channel carriage, but nothing about the reason behind the mandate.  I’m quite curious about this aspect.

    • The mandatory carriage, or

      The mandatory carriage, or “must-carry”, was established in 1992 and was seen as a means of preventing national or regional level gatekeepers from blocking local level content. The Supreme Court upheld the law in 1997 and has been turning away appeals ever since. Cablevision was the most recent if I recall. As cable providers grew, the concern was that cable operators, in order to save money, would offer only the largest affiliate broadcasts in a region. For instance, everyone in the southwest U.S would get the Los Angeles affiliates, which obviously wouldn’t provide the folks living in Yuma, AZ with particularly useful local news coverage. Local affiliates also feared the possibility that the big networks would ditch the affiliates completely and simply have one national network offering for cable providers. Independent broadcasters feared being run out of business by exorbitant carriage fees, assuming they weren’t simply denied carriage flat-out. The unencrypted requirement of must-carry didn’t come along until 1994. The FCC ruled that must-carry networks needed to be unencrypted as a means of increasing accessibility. The basic argument was that requiring a settop box (for a fee) was an impediment to access as all TVs were, and had been for the better part of a decade, “cable-ready”. There was also an interesting logic assertion that since must-carry was implemented to protect local broadcasters, and since local broadcasters used public airwaves, then the content they provided for free via public airwaves should also be free via cable.

      • millpub wrote:The mandatory

        [quote=millpub]

        The mandatory carriage, or “must-carry”, was established in 1992 and was seen as a means of preventing national or regional level gatekeepers from blocking local level content. The Supreme Court upheld the law in 1997 and has been turning away appeals ever since. Cablevision was the most recent if I recall. As cable providers grew, the concern was that cable operators, in order to save money, would offer only the largest affiliate broadcasts in a region. For instance, everyone in the southwest U.S would get the Los Angeles affiliates, which obviously wouldn’t provide the folks living in Yuma, AZ with particularly useful local news coverage. Local affiliates also feared the possibility that the big networks would ditch the affiliates completely and simply have one national network offering for cable providers. Independent broadcasters feared being run out of business by exorbitant carriage fees, assuming they weren’t simply denied carriage flat-out. The unencrypted requirement of must-carry didn’t come along until 1994. The FCC ruled that must-carry networks needed to be unencrypted as a means of increasing accessibility. The basic argument was that requiring a settop box (for a fee) was an impediment to access as all TVs were, and had been for the better part of a decade, “cable-ready”. There was also an interesting logic assertion that since must-carry was implemented to protect local broadcasters, and since local broadcasters used public airwaves, then the content they provided for free via public airwaves should also be free via cable.

        [/quote]

        Any chance you have references for this info?  The way I interpret that (as a logical person, as opposed to a money-hungry interested party), it would seem obvious that encrypting the local channels would prevent the very reason they were required to be unencrypted in the first place.

        • I’d like to point out that

          I’d like to point out that there are actually very few “must-carry” channels.  Most local channels are carried as a result of retransmission consent (which allows the broadcaster to charge a fee for the cable company to carry the signal…they cannot charge the fee if they opt for “must-carry”).  Therefore, the logic behind must-carry does not apply to those channels.

          • But it could if they changed

            But it could if they changed their minds, so it’s an important factor to consider.

          • I think “few” would be

            I think “few” would be overstating the situation. Almost all community access, educational and governmental broadcasts, and many local market channels are “must-carry” as are the affiliates in many small markets. The retransmission consent option is really only useful to broadcasters with exclusive local or regional content such as sports or for affiliates large enough to put the squeeze on a cable operator which is why we see retransmission disagreements pop up in markets such as New York or Boston, but not in Boise or Tucson.

            Besides, none of the issues involving Boxee or the CEA are necessarily about “must-carry”. Even if the FCC changes their rules about encryption, it will not change the law about “must-carry”. Understanding “must-carry” and where it comes from simply helps to clarify why we have unencrypted cable channels in the first place.

          • Is it too late to retract my

            Is it too late to retract my previous statement?  There are actually more than I thought.  According to the FCC, “Staff analysis of 2010 Annual Cable Operator Report (Form 325) (indicating approximately 780 of approximately 2000 stations elected or defaulted to must carry). Based on data submitted to the Commission as part of the 2010 Cable Price Survey, over 96% of cable systems carry at least one must-carry station, and, on average, each system carries more than seven must-carry stations.”

            On a related note, the must-carry rules are up for review:  http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0210/FCC-12-18A1.pdf

          • Retracted. The “must-carry”

            Retracted. Smile

            The “must-carry” rules up for review do not pertain to whether “must-carry” will continue, but as to whether cable operators need to continue to offer both digital and analog versions of the “must-carry” broadcasts and whether to continue to offer exemptions to smaller operators regarding HD broadcasts.

            The first issue relates to a broadcast’s viewability. Basically, as the transition to ATSC went into effect, the FCC ruled that cable operators had to carry both analog and digital versions of every “must-carry” broadcast to ensure compatibility with both old and new equipment, with the rules to be reviewed every 3 years. The viewability order is coming up for review again after being renewed in 2010. The general expectation is that it will be allowed to expire as analog tuner dependency has declined enough to justify allowing cable companies to drop the analog version of the broadcasts, a move that will also help in the second issue up for review.

            Under the 1992 law that established “must-carry”, cable operators were not allowed to degrade the quality of the “must-carry” broadcasts. As the digital transition coincided with the move to HDTV broadcasts, and as the cable operators were going to be forced to carry two versions of every “must-carry” broadcast, cable operators were allowed to apply for a waiver to the degradation order and not be required to carry the HD version of the broadcast. This exemption was geared toward small operators who lacked the bandwidth for the analog, the digital, and the HD version of the “must-carry” broadcasts. The general expectation is that these waivers will also be allowed to sunset with the assumption that the sunset of the viewability order will free up the bandwidth for HD “must-carry” broadcasts.

            These are specific rules regarding the FCC’s regulatory review process, not a change in the basic mandates of the Cable Television Consumer Protection and Competition Act of 1992. These “must-carry” rules under review do relate to the review of unencryption tangentially in that cable operators will have to maintain their clear-QAM broadcasts, but even if the unencryption order ends, the transition to HD, digital-only “must-carry” broadcasts will continue. 

          • No, I wasn’t saying that this

            No, I wasn’t saying that this review was for whether or not must-carry would continue.  But I think this has some relevance to the current discussion.

             

          • I don’t disagree that it is

            I don’t disagree that it is relevant, but still, only tangentially. There is definitely a sense that as long as the FCC is reviewing these “must-carry” rules, then the FCC should go ahead and review the encryption rule as well and allow cable operators to make all of the changes at one time. Changing all of the rules at one time would probably save cable operators money and be more convenient for consumers who might need to make changes in their setups anyway, but that does not necessarily mean that changing the encryption rules for basic tier is or is not a good idea.

        • The Cable Television Consumer

          The Cable Television Consumer Protection and Competition Act of 1992 (full text here) gives the FCC the power to regulate tiers and rates. Section 2 of the act provides the findings that outline the reasons that the federal government has a vested interest. The first several findings relate to the growth of the industry. Finding 8 in particular gets to the heart of the points that I outlined. Finding 9 draws the connection to the Communications Act of 1934 in which the concept of exclusionary gatekeepers was first laid out. Section 17 of the law tasks the FCC with determining what regulations were necessary to ensure compatibility between cable systems and TVs and VCRs, and whether encryption technologies should be limited to ensure compatibility. The law did not require unencryption, but rather called on the FCC to conduct a cost/benefit anaylsis on the value of encrypting cable signals with the goal of improving accessibility and compatibility while providing cable operators with protections against theft and ensuring signal integrity. The FCC at the time ruled that unencrypting basic tier service while allowing for encryption on the more lucrative premium tiers met that balance. The rule was effective as of 10/31/1994 and not only required unencryption of the basic tier but also required that all TVs and VCRs sold in the US be cable-compatible (see: COMPATIBILITY BETWEEN CABLE SYSTEMS AND CONSUMER EQUIPMENT for a plain-language breakdown of this rule. The rest of the page is pretty good too). Local “must-carry” broadcasters were defined as basic tier services. Other networks negotiated with the cable operators for carriage in basic or premium tiers. Section 17 also tasks the FCC with promoting compatible devices from other manufacturers and vendors and is the basis for the FCC’s involvement in the creation of CableCard and AllVid. Because the issue of unencryption was not written into law, but rather given to the FCC to determine as the overseeing regulatory authority, it also falls to the FCC to decide if their rules need revisiting, which is the process that the FCC has begun and Boxee and the CEA are objecting to. You are right that encrypting the basic tier will reduce accessiblity, which goes against the goals of the original 1994 decision, but the 1992 law tasks the FCC with evaluating how much encryption to allow and the basic argument at this point is that the competitive and technical issues involved have changed the situation back in favor of supporting the needs of the cable operators. Also I mentioned the appeals made against the 1992 law and its “must-carry” provisions. The 1997 ruling that upheld the Cable Television Consumer Protection and Competition Act of 1992 was Turner Broadcasting System, Inc. v. FCC. The Cablevision Systems Corp. v. FCC appeal that I was thinking of revisited the subject after Cablevision objected to being required to carry a home shopping network that Cablevision accused of setting up in its area specifically to get free carriage. The North Carolina Journal of Law and Technology has a good write up on the case.