News and Reviews....

Plug & Play .....    April  2003

Something very important for the average consumer happened on December 19, 2002. The Telecommunication Act of 1996 that directed the Federal Communications Commission (FCC) to develop a national standard to allow competitive manufactures to develop products that would "attach" to the cable system was agreed upon by the cable industry. It also applied to the general telephone system which has brought forth spectacular results in allowing consumers to choose fax machines, voice mail, cell phones and modems to "attach" directly to their telephone service, regardless of particular manufacture, color, individual features, size and intrinsic capabilities. The cable industry has been successful in blocking the enactment of the standard up until last year when a number of factors created an atmosphere in which negotiations could begin in earnest.

Starting in August 2002, major cable operators and consumer electronics (CE) companies met in private to try to reach some agreement. Over the course of five months the parties discussed all issues to finally come to a consensus. On December 19, 2002, the parties delivered to the FCC a completed agreement that contained recommendations for a national Plug & Play cable standard. The recommendations were within a 78 page document with many sections. 

In essence, the recommendations propose the following: 

• An FCC regulation on how cable systems would operate nationally and requiring IEEE 1394 (FireWire) connections on all high-definition (HD) cable boxes provided by cable operators at a future date;

• An FCC regulation prescribing the minimum capabilities of products (TVs, set-top boxes [STBs], VCRs and so on) sold as Digital Cable Ready;

• A model commercial license so that product manufactures could incorporate describing technology;

• Encoding rules that set forth consumers' rights to record and network content.

The FCC accepted the agreement and promptly opened the matter for public comment - a process known as a Notice of Proposed Rule Making (NPRM). The NPRM comment period closed in March. There is now a reply period for comments and then the FCC will issue regulations as it sees fit. Most see the FCC implementing regulations as recommended in the agreement which will have momentous changes in the consumer electronics industry for both retailers and manufactures.

Some key deadlines:

• December 31,2003 - Upon consumer request, cable company must replace HD cable box with one that has FireWire capability.

• July 1, 2004 - Complete transition of cable plant to national standard. FCC mandatory- ATSC digital tuner requirement for 50% of 36" & larger TVs.

• July 1, 2005 - Cable may no longer purchase HD cable boxes without FireWire. FCC mandatory- ATSC digital tuner requirement for 100% of 36" & Larger TVs and 50% of 25" to 35" sets.

This agreement does not provide for cable electronic program guide to be present by a Digital Cable Ready product. This is because the standards to allow this are not yet complete.

It has also become evident over the past year that cable is aggressively embracing HDTV transmission for leverage as it competes with satellite. Right now  67% of households are connecting to cable. In this competition between the two industries, cable is using its large pipe to allow delivery of local broadcast programming in High Definition. Satellite currently lacks the capacity to offer HD local-into-local service in all markets, although new transmission and encoding methods may improve this in the future.

Still to be worked out are the details of "must carry" rules - government regulations that define if and how a local cable operator must put a local broadcaster's signal on its system.

This agreement is a formative event in the consumer electronics industry.