[opendtv] News: Microsoft Backs Set-Top Deadline Delay

http://www.broadcastingcable.com/article/CA506980.html?display=Breaking+News&referral=SUPP

Microsoft Backs Set-Top Deadline Delay


By Bill McCOnnell -- Broadcasting & Cable, 2/25/2005 3:00:00 PM

Microsoft may have rescued cable's fight to postpone a  FCC rule that 
would hamper their deployment of low-cost digital set-top boxes.

Thursday, Feb. 24, Microsoft sent a letter to the FCC supporting the 
cable industry's request to delay until at least 2007 a deadline for 
eliminating cable-provided set tops that combined CableCARD security 
functions with channel surfing and interactive functions.

The requirement would have complicated cable's plans to go 
all-digital through widespread deployment of low-cost digital set 
tops, says Paul Gallant, Washington analyst for Stanford Research 
Group.

A delay would be especially positive for Comcast, Time Warner, 
Insight and Mediacom, he says, because deploying low-cost set tops 
will expand their base of video-on-demand customers and permit 
simulcasting of cable channels in analog and digital.

Currently the ban is scheduled to go into effect July 2006. Cable 
operators complain that the current deadline will force them to raise 
monthly lease rates for new set tops by roughly $2.50 per month.  
That cost increase, Gallant says, could lead to customer defections 
or lower margins.

The deadline was originally imposed to encourage a retail market for 
interactive digital boxes. The FCC judged that the market would be 
hindered if cable operators continued to supply all-in-one boxes, 
leaving customers less incentive to seek a retail version.

The FCC appeared to be leaning toward delaying the deadline until a 
lobbying blitz by Intel Corp. Cable lobbyists say Intel stands to 
benefit if non-cable equipment makers lead the retail box market 
because it is a the major supplier of their chips.

Microsoft first informed FCC Chairman Michael Powell of its decision 
to support a delay in the deadline via phone call Thursday.

Microsoft joined cable because company executives believe cable is 
moving toward developing retail products of its own. Maintaining the 
2006 deadline will "further impede the kinds of collaborative efforts 
between the consumer electronics, information technology and cable 
industries that are need to devise more forward-looking and 
effective" routed to developing a retail market, wrote Microsoft 
regulatory counsel Paula Boyd in the company's letter to the FCC.

Also signing the letter were James Coltharp, Comcast chief policy 
advisor, and Stephen Teplitz, Time Warner associate general counsel.
 
 
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