Set Tops Boxes…yet more

The set top box follies is turning into a long-running show. The latest show is back in Washington where the FCC has just issued a waiver to a cable company for their new set top box. The new waiver joins other recent decisions that mark a continued retreat on the part of the FCC from enforcing its long-standing “rule” that demanded that providers of cable services separate security from navigation. This was supposed to fix things so that you could go out and buy a set top navigation box made by a third party like TiVo and use the provider’s security apparatus to make sure you weren’t stealing service you hadn’t paid for. It’s a good idea—put the FCC has never consistently enforced it and in recent years has backed off requiring the cable card technology that it once relied on to provide the security end. The new waiver significantly extends the latest rationale for setting aside its own rules:

The Federal Communications Commission on Tuesday granted a three-year waiver to Evolution Broadband for two low-cost set-top boxes that do not include CableCards — a blanket exemption to the so-called “integration ban” that could pave the way for cable operators to deploy much less expensive set-tops.

The sub-$50 devices from Evolution Broadband covered under the waiver are one-way “limited-capability devices” that provide integrated security, referred to in the industry as digital terminal adapters. The boxes convert digital signals to analog format and don’t provide advanced functions like digital video recording.

Under the waiver, Evolution Broadband is allowed to provide the set-top units to any cable operator. The FCC reached the decision May 28 and issued the order Tuesday.

“It’s pretty clear — it’s an unlimited waiver,” John Egan Sr., chairman of Evolution Broadband, said in an interview with Multichannel News. “It’s something the industry should have done years ago.”

There are a couple of interesting things about the waiver. First, as the article indicates it is effectively an unlimited waiver for the alternate technology: anyone with the need can by one of these cheaper boxes and deploy it. That’s opens the floodgates pretty wide and skirts the edge of simply repealing the rule; albiet in favor of a single company—a favor that can’t long be reserved for one maker. Note, too, that LUS’ request for exemption is also about money—their application notes that the technology is simply not available at any cost for the Lafayette network and that LUS can’t afford to develop the technology on its own.

Another interesting thing, especially in light of Cox’s opposition to LUS’ waiver, is the way that the involvement of the American Cable Association highlights Cox’s purely mercenary motives in opposing Lafayette’s waiver. The cable industry as a whole (not excluding Cox) has benefited by repeated extensions of waivers and the ACA is quick to laud any exemption for its members. (See also another recent waiver for a cable company.) Cox’s opposition has nothing to do with principle or even self-interest in the broader sense-it has demanded and received similar waivers for its own operations. It’s opposition is purely about trying to game the FCC to gain a momentary advantage in one small city in south Louisiana.

Set top boxes are interesting (they are!) because of the critical position they occupy in the video/cable ecology. Everything passes through the set top box and as the number of channels expands and the sources of video multiply—think Amazon or Netflix—the capacity and openness of the set top box has profound implications for how the “broadcasting” industry evolves. In general Cox and other incumbents are hoping to control the experience (and dollars) of users by controlling the box. They want to own the box and use it to promote everything from Pay Per View to security services to its own controlled versions of internet downloads. They also want to make sure that you don’t simply start watching your shows through net-based services like Hulu and Netflix. And they want to make extra-sure that the set top box doesn’t evolve your TV screen into another, bigger montior to simply switch your attention over to the internet; a competing media that is already cutting deep into the “eyeballs” that are needed to support the “cable” services that all players count on for revenue.

Freeing the set top box from the constraints of the cable/broadcast model would be hugely beneficial. Especially if it leads to erasing the wall between the cable service and the internet service. That’s what incumbent providers most fear. LUS is unique on this continent for having opened a crack in that wall by making internet service directly available through its set top box and onto the screen. You can read wikipedia (alibeit pretty clunkily) in your house in Lafayette with NO computer and that is the real value—and threat—behind LUS’ use of the set top box.

NOTE: I’ve been repeating a mistake for quite a while on this blog that is related to the set top box issue: LUS cable service is not translated from digital to analog at the wall of the house. Instead it’s translated from digital into analog at the headend and sent on its own wavelength of light to side of the house where its combined with data signals from the internet side and piped over the coax to your set top box or TV. I’m not sure of how to understand this distinction; when you get deep into the tech and physics the line between analog and digital can get pretty blurry—especially when you’re talking of going from digital to analog and back and layering together purely digital and “made analog” signals on the same pipe. I’ve been promised a clearer explanation of the new description of how things work. And when I get it I’ll pass it on.