[opendtv] Re: 20041220 Mark's Monday Memo

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 23 Dec 2004 08:54:30 -0500

At 3:49 PM -0500 12/22/04, Manfredi, Albert E wrote:
>Craig, you've lost the logical thread, or perhaps you're
>disagreeing with the NCTA statement.
>In Mark's memo, pay attention to this item:
>>     - The $28 billion cost to cable for implementing the
>>  NAB plan - National Cable & Telecommunications Association
>>  (NCTA) president Robert Sachs explained in a letter to FCC
>>  chair Michael Powell that it was because an estimated 141
>>  million analog TV sets currently connected to cable without
>>  a box would need one costing between $50 and $200 each:
>  > <http://www.ncta.com/pdf_files/DTVexparte12.15.04.pdf>

Looks like we may be arguing past one another here.  I went back an 
reread your post, and it is now obvious that we were talking about 
two different things. I was specifically responding to your comments:

>But it would be equally logical to assume that an NCTA
>so concerned about the cost of providing STBs to households
>would have actively gone after some sort of "plug and
>play" agreement with CE manufacturers on their own,
>without being prodded on by the FCC. Isn't the same cost
>consideration valid for their own deployment of digital
>cable channels?

These subjects are related. The story that Mark posted talks about a 
response by the cable industry to an FCC inquiry about the cost of 
provisioning digital STBs for all subscribers. This is a cost that 
must be paid by someone if cable is to drop the analog tier. But the 
preference of the cable industry is that they would provide the 
boxes, as this is a profit center. I got sidetracked talking about 
the issue of cooperation between the cable and CE industries.

>Perhaps, for a change, we are agreeing. The NCTA letter to
>the FCC is an illogical attempt at obstruction.

Why? It is a simple acknowledgement of a fact. If you drop the analog 
tiers, 141 million working TVs stop working. To keep them working 
SOMEONE will need to spend $50 to $200 per set for a digital STB. The 
consumer might ditch the old set and buy one with a digital cable 
ready tuner. The consumer might buy a digital STB from a CE retailer. 
Or the consumer might lease the box(s) from the cable company.

The Ferree plan appeared to be heading down the path of RETAINING the 
analog tiers as a quick fix for the DTV transition. The downside of 
this plan was the reality that the cable systems might choose to 
carry a station's DTV signals as downconverted analog signals, thus 
maintaining compatibility with 141 million TVs. Broadcasters would 
likely go along with this, if the cable system carried the primary 
program in BOTH analog AND digital form, as well as the rest of the 
digital multiplex in digital form. But they are not likely to agree 
to carriage of ONLY a downconverted analog signal.

A rapid transition to ALL DIGITAL CABLE just shifts the problem from 
provisioning ATSC STBs for 85% of the market versus digital cable 
STBs. That being said, the cable industry will likely transition to 
all digital plants by the end of this decade, to achieve better 
bandwidth utilization of their plants. If there was something 
disingenuous in the NCTA filing, it may be that they inflated the 
cost for the boxes. i strongly suspect that a digital cable only STB 
can be built for less than $50 today, and will get cheaper as it 
becomes a tiny module that connects to the cable coming out of the 
wall, rather than using the STB form factor.

>I sort of think that was my point, right? There must have
>been a good reason for the NCTA to oppose the plug and
>play agreement, yes? At least during a transitional period,
>the NCTA should welcome a mandate that forces more STBs on
>the subscribing public.

Only if they get to provision those boxes. If a real marketplace 
develops, then we are likely to see what happened with telephones - 
The RBOCS got out of the business of leasing phones quickly, after a 
real marketplace developed. We can hope for the same with Cable STBs.

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