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Washington roundup

Tue, 01/31/2006 - 7:00pm
Jeffrey Krauss, President of Telecommunications and Technology Policy

Here are some of the open technology issues that I think will affect the cable industry over the next year.

Jeffrey Krauss
Digital TV transition—Congress adjourned in December 2005 without final action, but by the time you read this, legislation should have been finalized. Analog TV stations must shut down by February 17, 2009. Some of the analog spectrum will be allocated for public safety land mobile, and some will be auctioned for commercial use. Some of the auction proceeds, between about $1 billion and $1.5 billion, will be used to subsidize the purchase of converter boxes to convert off-air digital signals to analog, for display on legacy TV sets.

Voice-over-IP—The FCC has made three rulings based on the particular designs of three different VoIP techniques: (1) a service called Free World Dialup is not a telephone service; (2) the service offered by Vonage might or might not be telephone service, but whatever it is, it is interstate rather than intrastate in jurisdiction; and (3) AT&T's use of IP technology solely in its backbone network does not affect the classification of its long distance telephone service. But there has not yet been any general rule adopted on whether VoIP is telephone service or not, or what characteristics would exempt VoIP from telephone regulation. While that uncertainty continues, the FCC has ruled that whether or not VoIP is telephone service, VoIP services must allow wiretapping, a decision which is being appealed as beyond the FCC's authority. And the FCC has also ruled that VoIP services must support Enhanced 911 calling, but many VoIP services are unable to comply, partly because telephone companies won't supply the interconnection trunks, and partly because the VoIP customer locations are unknown. It's difficult to see how the FCC can apply these rules to foreign VoIP operators that have U.S. customers, or to out-of-country customers of U.S. VoIP services.

Video-over-IP—SBC is arguing that its use of IP technology does not fit the definition of cable service. If so, it might be exempt from cable franchise requirements, from carrying closed captions and emergency alerts, from paying franchise fees and supporting public access channels, from cable privacy laws, etc. The initial skirmishes are being fought in California and Connecticut, but Washington will soon focus on these concerns. If SBC succeeds, which is unlikely, the cable industry will modify its network designs to escape regulatory burdens also.

Digital must-carry—Broadcasters have given up pushing "dual carriage," a government requirement that cable companies carry both the broadcasters' analog and digital signals, although cable companies are voluntarily carrying both for some broadcasters. Congress ducked the issue of whether cable companies must carry the broadcasters' full 6 MHz digital multiplex, or only the "primary program," and there is still no FCC decision in sight. But whatever that decision turns out to be, it will be appealed.

Network neutrality—Cable companies allow cable modem subscribers to visit any Web site. The cable industry is on record as opposing government intervention for a problem that doesn't exist. But the Internet is not neutral. For example, search engine sites already demand that Web sites pay extra to appear on the first page of search results. SBC execs say they plan to create a two-tiered Internet service, where the telecom carriers' own Internet services would be transmitted faster than those of their competitors. And Skype has complained that telcos have interfered with its deployment of VoIP. This could mushroom into a big government enforcement bureaucracy.

Digital rights management—Private agreements between programmers, cable operators and receiver manufacturers already protect against unlimited copying and redistribution of premium digital cable programming. But since the Court struck down the FCC's "broadcast flag" rules, broadcasters have no such protection. Legislation will be introduced to deal with this.

Navigation devices—The cable industry and the consumer electronics industry continue to negotiate a two-way Plug & Play agreement, but progress seems slow. Meanwhile, the cable industry is demonstrating a downloadable security approach that, if successful, would be less expensive and less cumbersome than the CableCARD replaceable security embodied in the one-way digital cable-ready receivers. That's also relevant to the cable industry's Court appeal of the FCC's decision to prohibit cable operators from providing set-top boxes that have integrated security circuitry. The FCC exempted DBS operators from this integration ban, but not cable operators.

Increased DBS competition—Echostar 10, a DBS satellite to be launched in 2006, will have 49 distinct spot beams, providing a 12-to-1 frequency re-use factor. Echostar recently got FCC approval to use both Ku-band and Ka-band "fixed" satellites to distribute video as well. The result is much more capacity to support "local-into-local" TV distribution. The good news is that more cable systems will be able to show they are subject to competition and therefore exempt from rate regulation by local franchise authorities.

Have a comment? Contact Jeff via e-mail at: jkrauss@krauss.ws

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