FCC Rejects Comcast In Bid for More Time For Set-Top Box Change
- a major victory to consumer-electronics makers.
By AMY SCHATZ and PETER GRANT
January 11, 2007; Page A6, WSJ
WASHINGTON -- Federal regulators denied a request by Comcast Corp. for more time to make changes to the set-top boxes it offers, delivering a major victory to consumer-electronics makers in their decade-long battle with cable companies for control of the television.
Federal Communications Commission Chairman Kevin Martin, speaking at the Consumer Electronics Show in Las Vegas yesterday, said it was way past time for standard technology to be used, so consumers wouldn't be tied to rental set-top boxes and would soon have more options to access digital and Internet video on new television sets.
"It's important to find a way for consumers to go into Best Buy, buy a TV, hang it on the wall and plug it in and it works," Mr. Martin said, following the speech.
Currently, cable companies design their networks so that any TV, set-top box, digital-video recorder, DVD player or other set-top device can deliver their signals, as long as they are outfitted to use special "cable cards" that cable operators are required to provide. But cable companies don't have to use the cards in the set-top boxes they rent to subscribers. Device manufacturers say this gives cable companies a big advantage.
Mr. Martin's decision means that some cable operators must use the cards in the boxes they provide consumers, even lower-end models, starting in July.
The FCC denied a request by Comcast last night to postpone implementation of this decision, and is expected to deny a broader request by the cable industry soon. The agency gave smaller operators more time to comply.
It was a blow for cable operators, particularly Comcast, which argued that the FCC's decision would result in higher costs for consumers, as much as $2 to $3 a month, because it will require more-expensive equipment. The decision may eventually jeopardize the steady revenue stream cable operators have received by renting boxes to consumers.
"This amounts to an FCC tax of hundreds of millions of dollars on consumers with no countervailing benefits," said Comcast Executive Vice President David Cohen. He said Comcast will appeal the decision.
The FCC's decision may eventually be a boon for consumer-electronics makers, which will finally be able to market competitive set-top boxes and cable-ready digital TVs to consumers tired of renting from cable operators.
Congress directed the FCC more than a decade ago to take action to encourage competition in the set-top box market, but that effort has been plagued with delays. The FCC required cable operators to come up with technology that would allow consumers to directly plug a cable line into a TV set.
The cable industry came up with a credit-card-sized device that could be plugged into digital TVs, set-top boxes, DVD players and other devices and would allow consumers to do without a separate box from their cable operator. However, the device originally didn't support two-way features, such as allowing users to use popular features like on-demand movies and on-screen programming guides. Newer devices offer those features.
Write to Amy Schatz at Amy.Schatz@wsj.com and Peter Grant at peter.grant@wsj.com |
