Cable Firms, TV Makers Strike Deal on Digital TV
Wed December 18, 2002 08:20 PM ET
By Andy Sullivan and Jeremy Pelofsky
WASHINGTON (Reuters) - Television makers and cable operators have reached a deal that would allow digital signals to pass seamlessly over their equipment, clearing a cumbersome hurdle in the transition to digital television, people familiar with the situation said on Wednesday.
The two industries were expected to announce the deal on Thursday, ensuring that the roughly 70 million homes that subscribe to cable will be able to enjoy the crisp pictures and advanced features digital signals offer, the sources said.
Originally designed to be complete by 2007, the digital switch has yet to take off due to the high cost of new digital televisions, limited programming, and disputes over how consumers can record their favorite shows without bootlegging them over the Internet.
For months, cable operators and TV makers had been at loggerheads over compatibility standards as well, but the deal to be announced on Thursday will allow a seamless "plug-and-play" connection from the cable wire to the television, the sources said.
"The goal of this deal is to be able to plug digital cable service wires into the digital TV set box and get all the programming," said one person familiar with the announcement.
The Consumer Electronics Association and National Cable & Telecommunications Association are set to hold an 11:30 a.m. EST news conference to unveil the deal.
"We think this is a landmark agreement, that will help cable customers nationwide to join the digital television transition," said Jeff Joseph, a spokesman for CEA. A spokesman for the NCTA declined to comment as did an FCC spokeswoman.
Expected to join in the agreement are major cable operators who hold 70 percent of the market like Comcast Corp. CMCSA.O and AOL Time Warner AOL.N as well as 14 television set makers including Sony Corp. 6758.T , Thomson Multimedia's TMS.PA RCA and Matsushita Electric Industrial Co Ltd.'s 6752.T Panasonic.
However, the sources cautioned that there will not be integrated products available immediately for consumers to snap up, but they will likely start hitting the shelves in about two years. Digital set-top boxes that can receive digital signals are already in stores.
The government has tried to accelerate the transition by requiring digital tuners to be placed in new sets starting in mid-2004 and pushing programmers to increase available content. Meanwhile lawmakers have proposed to stop analog over-the-air broadcasts by the end of 2006.
The plan to be unveiled will be presented to the Federal Communications Commission for approval and implementation. There also may be a need for legislative action by lawmakers on Capitol Hill.
"It's certainly unusual for both industries marching up to the FCC saying 'regulate us,"' said David Arland, an official at Thomson. "We're doing this because it's a greater consumer good, it means eventually more fully functional high definition products."
Still to be resolved are standards over two-way communications, which would add powerful interactive features that could, for example, allow consumers to order up movies for viewing without leaving the couch.
Plus, any changes to the "fair use" rights of consumers would likely have to go through rigorous review by regulators before any changes could be made, the sources said. |
