So TiVo sued Verizon. Then Motorola sued TiVo in apparent retaliation (much like Microsoft sued TiVo after TiVo sued AT&T). Now TiVo is filing a counter suit against Motorola (as they did against Microsoft), and to top it off they’ve included Motorola customer Time Warner Cable in the new suit. There’s some high stakes legal poker going on here.

Tongue out of cheek, the timing is primarily due to the stay on the Motorola suit, which was in place while the AT&T & Microsoft cases proceeded as they involved the same patents, being lifted. As long as the case was stayed TiVo was under no pressure to file a counter suit, but not things are moving forward. TiVo announced the suit in a simple SEC filing:

On March 26, 2012, the Company filed an answer and amended counterclaims in response to a patent infringement suit that Motorola initiated against the Company in the Eastern District of Texas in 2011 that was stayed until earlier this year. In its response, the Company alleged counterclaims against Motorola and Time Warner Cable, one of Motorola’s customers, for infringing U.S. Patent Nos. 6,233,389, 7,529,465, and 6,792,195 owned by TiVo.

The full court filing has been posted on Scribd (thanks to Sam Biller):
TiVo files answers and amended counterclaims against Motorola & Time Warner Cable

The patents involved are the same core patents behind the EchoStar/DISH Network and AT&T settlements, as well as the ongoing case against FiOS. TiVo’s been successful so far, 2 for 2, so that’s a good sign. Time Warner Cable is the only remaining top five MVPD in the US that TiVo doesn’t have a business agreement or a legal settlement from. TiVo has business agreements with the top two, Comcast and DirecTV, and fifth place Cox Communications. Third place DISH Network settled with TiVo. That leaves TWC in fourth place, and many investors have wondered when TiVo would take some form of action against TWC if they didn’t come to an agreement.

These legal fights tend to drag on for years, so I’m not going to hold my breath waiting on any outcome just yet.

Adjusting for Comcast’s new numbers the top five MSOs, Cablevision, Charter Communications, Comcast Corporation, Cox Communications, and Time Warner Cable, collectively deployed 557,296 CableCARDs. Extending that to the top ten MSOs gives a small bump to 595,296, which shows how many customers are concentrated into the largest MSOs. By way of comparison, these same ten MSOs have installed more thsn 32,000,000 CableCARDs in MSO provided STBs. And that is the best evidence of just how badly CableCARD has flopped in the retail market.

At this point TiVo is effectively the only retail CableCARD vendor left! There are a handful of PC CableCARD tuner products, but the total sales are negligible. CableCARD enabled TVs are all but gone from the market. And now that Moxi is gone I think TiVo is the last retail CableCARD DVR. Personally I think this demonstrates why we need AllVid to create a truly competitive open market.

Cablevision reports 27,472 CableCARD subscribers, an increase of 8% over the previous report. But before you get too excited, the new numbers include subscribers from Optimum West, which was integrated into Cablevision during the quarter. These 27,472 subscribers account for 39,462 CableCARDs, so there are a number of multi-card households. During the reporting period they actually had 5,288 new CableCARD installs, 57% of which were self-installs. The rest opted for professional installs, which cost an average of $34.95. The good news is they average 1.0 truck rolls per install, so they get it right the first time. And they charge $2/month per card.

Charter reported a total of 31,884 CableCARDs in service. And they still average 1.5 truck rolls per professional installation, the worst of the lot. I can believe it, I’m a Charter customer. The techs I’ve worked with have all been great, but many have expressed a desire for more training on CableCARD and TiVo. I’ve heard from a number of them that they’re really not being trained, and it seems like there are a couple of ‘experts’ in the area that they always end up calling. (I’ve had to have Charter out a couple of times for CableCARD and/or Tuning Adapter issues. Invariably it ends up being a back end problem, but the phone techs give up and insist on sending truck. Then the tech ends up calling around until he finds the right person to fix the issue.) Charter also charges $2/month per card, and an average of $35.00 for professional installs.

Comcast, from their corrected 2/23/12 numbers, has 370,407 CableCARDs in customer homes. Since the last report they installed 25,789 new cards, with only 29% being self-installs. It seems like Comcast customers opt for professional installs 71% of the time, which I find surprising, though it might be explained by the pricing. While they charge an average of $26.00 if it is a separate trip, it drops to $7.15 if it is part of a larger installation. And it takes an average of 1.04 truck rolls, so odds are good they’ll get it right the first time. Comcast’s first card is generally free, and additional cards in the same device average $1.50. (It isn’t in the report, but I believe additional cards in other devices are normally $2/month.)

Cox has 52,479 CableCARDs in service, at an average cost of $1.99/month. Customers who opt for a professional install pay an average of $24.00, though it takes an average of 1.1 visits. So your more likely to get to have the chance to get to know your installer better than with Cablevision or Comcast.

TWC has 75,542 CableCARDs in use with 54,575 subscribers, so again we know there are a number of multi-card households. TWC’s cards are the most expensive, at an average of $2.37 (I’ve heard that they charge quite a bit in some areas, which would explain the elevated average). Surprisingly their install numbers are even most skewed than Comcast’s, with 83% electing professional installs, which cost an average of $28.16. Why do so many people opt for professional installation? I’d love to know the motivation there.

All in all, not much has changed since the last report. I wish the different MSOs would normalize their reporting – some report self-install vs. professional installs. Some report costs with more granularity. Subscribers vs. number of cards. It’d be nice if they’d all report the same things in the same way. I can dream.

AT&T has settled with TiVo, offering payments that will total at least $215 million, and potentially much more, in exchange for a mutual patent licensing deal. TiVo will receive $51 million up front, followed by recurring quarterly payments guaranteed through June 2018, for a total minimum payment of $215 million. In addition to these minimum payments, AT&T will pay recurring per-subscriber monthly license fees should the level of U-Verse subscribers exceed“certain levels”. Just what those levels are wasn’t revealed in the press release, but TiVo apparently expects the total payments to“significantly exceed” the minimums. In this case what’s good for AT&T is good for TiVo – the more subscribers they get, the more TiVo makes.

The Form 8-K TiVo filed with the SEC regarding this settlement reveals more of the details about the payments as well as the patents involved:

Under the Agreement, AT&T has agreed to pay TiVo a minimum amount of $215,000,000 (the “Payment to TiVo”) plus incremental monthly fees per DVR subscriber if the growth of AT&T’s subscriber base exceeds certain pre-determined levels. Based on currently available industry forecasts, TiVo expects that the total fees payable to it by AT&T under the Agreement will significantly exceed the guaranteed minimum Payment to TiVo. The first $51,000,000 of the Payment to TiVo is due on January 3, 2012 and the remaining amount is due to TiVo in equal installments 30 days after the end of each calendar quarter in the amount of $5 million for the first four calendar quarters and approximately $6.5 million in subsequent calendar quarters through the calendar quarter ending June 30, 2018. Any incremental additional per subscriber fees are due to TiVo on the same schedule.

Pursuant to the Agreement, TiVo granted AT&T a limited license under its advanced television patents, including the patents that TiVo had asserted against AT&T (U.S. Patent Nos. 6,233,389, 7,493,015 and 7,529,465), to make, have made, use, sell, offer to sell and import advanced television technology in connection with AT&T multichannel video programming services, including AT&T U-verse, subject to certain limitations and exclusions. AT&T granted TiVo a limited license under its advanced television patents, including the patents that AT&T had asserted against TiVo (U.S. Patent Nos. 5,809,492, 5,922,045, 6,118,976 and 6,983,478), to make, have made, use, sell, offer to sell and import advanced television technology in connection with TiVo products and services, including products and services provided to other multichannel video programming service providers, subject to certain limitations and exclusions.

We may learn more about the terms when TiVo files their Form 10-K after their fiscal year ends on January 31, 2012.

In addition to the settlement payments there is also the indirect benefit to TiVo in reducing their legal costs by no longer needing to pursue the suit. It also eliminates the distraction and allows their legal team to focus their efforts on Verizon. Speaking of Verizon, that’s where all eyes are now as they’re currently the sole remaining target for TiVo’s patent suits. With victories against EchoStar/DISH and now AT&T, it doesn’t seem unreasonable to expect Verizon to taking a serious look at their chances of victory and weighing it against the cost of a settlement. I fully expect TiVo to also be making a reinvigorated push to establish deals with the remaining US cable providers, such as Time Warner Cable, Cablevision, and Bright House Networks.

Taking a look at the top 10 US MVPDs (as of June 2011):

1. Comcast Corporation 22,525,000 – business relationship to allow VOD access to retail TiVo units, now in trials
2. DirecTV 19,433,000 – business relationship with licensing and new THR-22 DirecTiVo just released
3. Dish Network Corporation 14,056,000 – $500 million legal settlement and licensing
4. Time Warner Cable, Inc. 12,235,000 – no known agreement or licensing
5. Cox Communications, Inc. 4,838,000 – business relationship to allow VOD access to retail TiVo units, in development
6. Charter Communications, Inc. 4,413,000 – distributes TiVo directly to customers
7. Verizon Communications, Inc. 3,848,000 – ongoing patent lawsuit
8. AT&T, Inc. 3,407,000 – $215 million legal settlement and licensing
9. Cablevision Systems Corporation 3,284,000 – no known agreement or licensing
10. Bright House Networks LLC 2,139,000 – no known agreement or licensing

In addition, of course, TiVo is being distributed to customers of smaller cable MSOs Suddenlink (#11), RCN (#16), and Grande Communications (not in the top 25). Each victory, licensing deal, or business arrangement strengthens TiVo’s hand at the negotiating table. TWC, like Comcast, is large enough that they develop a lot of their technology and software in house. As such I don’t really expect them to adopt TiVo as their new platform, as Charter has. However, I would not be surprised to see them make a deal with TiVo to support VOD on retail TiVo units, just as Comcast and Cox have, in exchange for staying out of the legal crosshairs.

Verizon is more of a wildcard. They have a rocky track record when it comes to developing and releasing software updates for their FiOS STBs. And they have a small enough user base that outsourcing their software development to TiVo and benefiting from their economies of scale might benefit them. Their architecture is not all that different from Virgin Media in the UK and ONO in Spain. TiVo has already shown they can handle a hybrid cable/IPTV system with those networks, which is what FiOS is. To me that would be the ideal solution, as FiOS joining Team TiVo would increase development funding. And it is likely that they’d push the addition of features to match what they’ve implemented in house, which would benefit everyone. But they may also simply negotiate a licensing settlement like AT&T’s.

AT&T is pure IPTV and they’re using Microsoft software end-to-end. It was pretty much an impossibility that they’d adopt TiVo’s software for their STBs given the infrastructure they’re using. The licensing settlement is really the best result we could hope for in this case. Cablevision and Bright House could easily adopt TiVo as their next-generation STB platform. They’re smaller than Charter, who already has, and Suddenlink, also a TiVo user, is more than half as large as Bright House.

Oh, there is another reason I think TiVo will move more aggressively to establish deals with more MSOs on the back of this settlement: Google. More specifically Google’s pending acquisition of Motorola, the largest STB vendor for cable systems in the US, and Google TV. Back in August when I looked at the announcement, and specifically at the implications for TiVo, and then more recently in November, I stated that I full expect Google to bring the Google TV platform to Motorola STBs as a standard option.

More and more MSOs are looking at OTT (over-the-top) content to increase their competitiveness, which is a prime reason MSOs have turned to TiVo, and Google TV’s Android platform and apps would be a huge boon. Google has Sage TV to provide DVR technology and placeshifting, which also allows them to compete with EchoStar’s SlingLoaded offerings. They could build the streaming client into every Android phone and tablet sold, as well as Google+, that’s a very big stick – or carrot, depending on how you look at it. If Google’s acquisition of Motorola goes through, they will do this. I’m certain of it; it just makes too much sense.

But it will all take time, most likely a few years. The acquisition itself will take time. And then the work to port Google TV to Motorola HW and/or developing new HW to better support Google TV/Android needs to be done. Then they need to land MSO clients for the new HW/SW bundle, and get it deployed. It all takes time. And that time gives TiVo a window to expand their beachhead in the industry. Once an MSO has a significant deployment of TiVo HW and/or SW in the field they’re much less likely to walk away from that investment and adopt another platform.

I expect TiVo to redouble their efforts on the back of this victory. They may even have some deals in their back pocket to announce at CES this month. But for now they can celebrate one victory in an ongoing war.

That’s how much of a flop CableCARD has been at retail, less than 2% of the cards deployed are used in retail devices, like TiVo. I don’t blame the retail devices, but rather the pain involved in obtaining CableCARD (self-installs only mandated 8/8/2011) and the artificial limitations on retail CableCARD devices (no OnDemand, for example). tru2way is an even bigger flop, basically being stillborn. And this is why I don’t feel like we can rely on cable industry developed solutions, but rather we need something like a solid AllVid mandate backed by and FCC with some teeth to make sure it happens.

But I digress, let’s get back to this report and look at each of the five MSOs reporting.

Cablevision has 25,303 CableCARD subscribers with 36,692 cards deployed, an average of 1.45 per household. For this reporting period, which spans time before and after the self-install mandate, 43% or 1,395 were professional installs and 57% or 1,851 were self-installs. They charge $2/month per CableCARD. And if the customer elects for a professional installation there is a fee that averages $34.95, but the average number of truck rolls per install is just 1.0, so it seems like they get it right the first time.

Charter Communications had 31,425 CableCARDs in service as of August 31, 2011. They begin allowing self-installs on August 1, before that a professional installation was required. Interestingly Charter says their average number of truck rolls per install is 1.5, which indicates they’re customers probably have some more trouble getting it working. I’m a Charter customer and I have required multiple truck rolls in the past due to installers not having working cards on their truck, etc. Charter also charges and average of $2/month per CableCARD, and there is an average $35.00 fee for professional installs.

Comcast is the big one, with 367,064 CableCARDs in customer homes. In this reporting period they installed 38,403 CableCARDs, split almost exactly 50/50 between professional installs and self-installs. The average truck rolls per install is 1.03, so it seems like they get it right nearly every time. Comcast also has the best pricing, the first card is free and each additional card is $1.50/month. For professional installation, if it is part of a larger install it is an average of just $7.15. For a trip just to install a CableCARD they charge an average of $26.

Cox Communications has 50,791 CableCARDs in the field. Each card costs $1.99/month. For professional installations they charge an average of $24 and it takes an average of 1.1 truck rolls. So not as good as Cablevision and Comcast, but certainly a lot better than Charter.

Time Warner Cable has 74,047 CableCARDs in place with 53,503 customers. Until 8/8/2011 and the FCC mandate they required a professional installation, since they they’ve allowed self-installs. Which helps explain the 87%/13% split for the reporting period. The good news is they seem to get it right with an average of 1.03 truck rolls for professional installs, which cost an average of $26.64. CableCARDs run an average of $2.50/month.

So it seems like Charter is having the most trouble getting CableCARD working right the first time, and Cox is struggling a little, but Cablevision, Comcast, and Time Warner Cable are doing fairly well in that department.

There’s more interesting information in the full report, if you care to read it.

Perhaps unsurprisingly this inspired TiVo to file a comment with the FCC a couple of weeks later, using the blog entry as a basis to urge the FCC to intensify CableCARD oversight. Clearly it is important for TiVo’s retail business that consumers be able to obtain CableCARDs with minimal hassle.

Well, now Time Warner Cable has filed their own comment with the FCC, responding to TiVo. You can read the full PDF here, but as you might expect it basically boils down to “Our bad, we screwed up. But hey, we made it all right in the end and it’ll never happen again. We don’t need any more oversight. Trust us.”

TWC serves more than 12 million cable customers, and among such a large customer base some isolated service issues are inevitable, whether as to CableCARD devices or other issues having nothing to do with those devices. TWC strives to provide exemplary service and is proud of its record, but mistakes as to any of the services it provides cannot be eliminated altogether, just as is the case with any provider that serves millions of customers. The key point is that, while TWC has encountered occasional complaints in serving customers with CableCARD devices, the mere fact that some issues have arisen by no means points to any systemic concerns with TWC’s handling of CableCARDs or provides any basis to believe that TWC has engaged in anti-competitive conduct.

I don’t buy it, just a glance at the forums at TiVo Community will show you countless posts with similar complaints for TWC and other MSOs going back to the launch of the Series3. I certainly don’t expect TWC, or any company, to be perfect. Companies are made up of humans, and humans make mistakes. I’ve certainly made my share. But it certainly seems like these “isolated service issues” sure come up a lot. If this were an isolated incident, a rare occurrence, I’d find it easier to let them off the hook. But given what I’ve seen posted from users, I’m not so inclined to be forgiving.

While TiVo alleges that this particular customer was a victim of anti-competitive practices by TWC, TWC’s investigation of the underlying facts indicates that the difficulties he encountered resulted primarily from the inadvertent provision of incorrect information by TWC customer service representatives about how TWC’s CableCARD practices apply to the TiVo Premiere DVR.

Could that be a little more convoluted? So they claim the incident is primarily due to bad information accidentally being provided. But that doesn’t seem to cover the incident as reported. The author was repeatedly given bad information – about how he could obtain a card, pricing, etc. Then the installer failed to show up for the scheduled installation appointment. And when the installer showed up for the rescheduled appointment they were ill-trained on CableCARD. That’s a lot more than an oopsie with some bad info.

Ironically, if the Commission were to intensify its oversight of cable operators’ CableCARD-related practices as TiVo requests, TWC likely would have diminished flexibility to address customers’ needs. Forcing operators to divert resources from customer service toward efforts to comply with detailed regulatory mandates would be counterproductive. Indeed, avoiding excessive regulatory burdens is particularly important in this context, given the Commission’s stated interest in phasing out CableCARDs altogether.

This reeks of FUD wrapped in a veiled threat. You wouldn’t want to regulate us anymore, we’d just hate if if that added oversight made our service worse. And you wouldn’t want that, would you? No, of course you wouldn’t. Everything is just fine the way it is.

For instance, although the customer claimed he was told that leasing a CableCARD instead of a set-top box would result in a price increase—which forms the basis of TiVo’s allegation of price discrimination in its letter—TWC’s records show that the customer in fact is receiving a discount on his monthly bill of $7.75, consistent with 47 C.F.R. § 76.1205(b).

While it is great that the information the customer was given that it would cause a price increase was actually incorrect, it doesn’t change the fact that the customer was told there would be a price increase. That’s the kind of thing that can scare a customer off and make them return their new TiVo to avoid the higher fees. How many times had this bad info been given out? And how many of those customers decided it wasn’t worth it?

I don’t think cable MSOs are the evil, conniving villains that some users paint them as. But I do think they’ve been pretty reluctant to accept CableCARD and properly support it. And most of the progress that has been made has come under duress, forced by the FCC. I don’t trust the MSOs to ‘do the right thing’ if left to their own devices. We wouldn’t have open access and CableCARD, flawed as it is, at all without the FCC. I doubt we’d have Tuning Adapters for SDV if the FCC hadn’t given the industry the hairy eyeball when they started rolling out SDV. And we sure as hell wouldn’t have widespread CableCARD self-install without the FCC mandate.

One new piece of information, the offer will initially roll out to customers in the New York City area only. TWC will decide if and when to expand the offer to other service areas based on the response they get from NYC customers.

Via Multichannel News.

It is also a none too subtle shot across the bow of content providers. TWC is currently at loggerheads with Viacom and other providers over TWC’s iPad app which allows customers to stream content directly to the tablet. Viacom claims TWC’s existing content licenses do not cover this, TWC, of course, claims that they do. Offering the Slingbox seems like a clear statement of their being more than one one to skin a cat, as it were.

Via The New York Times.

The press release cites 750,000 customers for Insight, the discrepancy is probably explained by different counting methods – the NCTA is concerned only with video, while data and voice customers are counted in the higher figure. The PR states Insight is“serving approximately 537,000 high-speed data subscribers, 679,000 video subscribers and 297,000 voice subscribers”.

I think we’ll see continuing consolidation in the MVPD space given the gulf between the top four MVPDs and fifth place Cox at 4,899,000 with numbers dropping by roughly a million for every two spots on the list, until it is under a million after twelfth place Mediacom at 1,175,000. With broadband content access, OTT content, mobile apps, etc., all becoming important competitive offerings the larger providers, with economy of scale on their side, will have an easier time of it. I think this will put pressure on the mid-sized MSOs to merge with peers or acquire smaller MSOs to boost their userbase, and for the smaller MSOs to look for a buyout.

Time will tell.

(#6 Charter, #11 Suddenlink, and #16 RCN are the three MSOs who’ve committed to using TiVo hardware.)

Via CNET News.

• Comcast: Checking their website it doesn’t look like anything has changed since last week. There are still FAQs saying that you need a professional install, but CED Magazine is reporting that they’re allowing self-installs now:
  

  “Certain markets have had limited self-install options for CableCards since about 2007,” said Comcast spokeswoman Jenni Moyer. “Beginning in early August, we’ll start rolling out a CableCard self-install program across our footprint where customers will be able to go into our sales, service or payment centers and pick up a CableCard self-install kit, go home, install it, and then call in to activate it.”

  Comcast doesn’t ship the CableCard self-install kits to customers.

• Time Warner Cable: As expected, TWC has started allowing CableCARD self-installs. They’ve even created help guides for InfiniTV, Moxi, and TiVo.
• Cox Communications: They were already allowing CableCARD self-installs before the mandate. They have an instruction sheet online.
• Charter Communications: Their website gives mixed signals. The FAQ still says professional installation, but they have a self-install page. I think they just missed updating the page:
  

  Due to the technical complexity associated with the pairing of the devices, all installations of a CableCARD MUST be completed by a Charter Technician. Self-installation of CableCARDs is NOT an option for customers and thus customers cannot pick up a CableCARD from a local office

• Verizon FiOS: As with Cox, they were already offering CableCARD self-installs. You can order your CableCARD online.
• Cablevision: They’ve also been offering CableCARD self-installs. The information is on their site.
• Bright House Networks: They allow self-installs for Road Runner broadband, which means they should be allowing CableCARD self-installs as of August 8th. But I can’t find info on self-installs on their site, and there is a page that still says they’ll be allowed soon:
  

  CableCARDs are professionally installed by Bright House Networks. The option to install a CableCARD yourself will be available in the near future.

  If anyone knows of information on their site indicating CableCARD self-installs, leave a comment.

• Suddenlink Communications: According to their CableCARD FAQ they are allowing self-installs.
• Mediacom Communications: I couldn’t find a good reference on their website, but a post on their support forum by one of their reps on Saturday indicates they are allowing users to pick up CableCARDs and do self-installs:
  

  You can pick-up or have a tech install a cable card for you for a minor fee. This would be $1.99 per month for each card.

• Insight Communications: I couldn’t find anything useful on their site. Searching their site for ‘CableCARD’ only returns four hits. It looks like they offer broadband self-installs, so they should be covered by the August 8th mandate. If you have more info, let us know in a comment.
• CableOne: Same as Insight, nothing clear from their site. It seems like they offer broadband and cable box self-installs, so they should also be covered under the August 8th mandate. Leave a comment if you have any info, thanks.
• WideOpenWest Networks: Their website still says they require a technician to install CableCARD, it is under the ‘Equipment’ section of the FAQ.
  

  Can I install a CableCARD by myself?

  No. To ensure that your installation is performed properly, a technician is required to install and activate your CableCARD. Please contact us to set up an installation appointment.

  They do seem to allow cable modem self-installs, so they should be under the mandate.

• RCN: I couldn’t find a good page on their site, but I did find a forum post on DSLReports dated July 28th, by Jason Nealis, RCN’s Sr. Director, Video Product and Video Operations:
  

  The way this will work is that a customer can receive a kit via mail or they can pick one up at a local office.

  In the Kit it will have instructions on whom to call, basically you will install the card and then go thru a IVR and have the work order closed and a hit sent to the card.

  Then you will have to call in with your pairing information and have the card paired to receive encrypted channels.

OK, I think that’s deep enough. These smaller provider’s tend to have sites that aren’t as useful when it comes to finding info, and those I’ve listed already cover the vast majority of cable customers in the US.

If you have any additional info, please leave a comment.

EDIT 8/11: Matthew Zinn, Senior Vice President of General Counsel for TiVo, today made a blog post about the new CableCARD rules which included a few useful links:

In the meantime, for additional information regarding CableCARDs and consumers’ rights visit www.fcc.gov/guides/cablecard-know-your-rights or www.fcc.gov/guides/digital-cable-compatibility-cablecards-plug-and-play.

If you have questions as to whether your cable operator is complying with the CableCARD rules, you can email the FCC at CableCARDEnf@fcc.gov or call (202) 418-1160. To file a complaint, visit www.fcc.gov/complaints.

If your cable provider isn’t following the new rules, report them to the FCC.

Starting August 8, 2011, you’ll be able to find everything you need to setup, install, and support your CableCARD* right here.

This one-stop shopping capability includes information on (1) how to obtain a self-install kit, and (2) determine your eligibility for a “Bring Your Own Box (BYOB)” credit for using a CableCARD-compatible device purchased at retail rather than a Digital Set Top Box leased from Time Warner Cable.

In the meantime, go to Switched Digital Video for information on CableCARD devices and tuning adapters. You can also browse our FAQs.

Don’t forget to bookmark this page and come back on August 8th.

Thanks for choosing Time Warner Cable.

So the good news is it sounds like they’ll be ready to allow self-installs on time. The bad news is it sounds like they know what they need to do in a week, but they’re going to wait until then instead of offering it to customers now. Or maybe I’m just bitter and cynical and tend to read cable industry statements somewhat negatively. Of course, at least they have a statement on this indicating they’ll be ready. That’s more than we can say for some other MSOs.

The New York Times’ Gadgetwise Blog on Monday posted an entry about TiVo entitled “TiVo, Nice Service if You Can Get It“. It is generally favorable about TiVo itself, but makes it sound like the hassle of getting TiVo may not be worth it because of the increased costs and trouble with getting it set up. But the way I read it is an indictment of cable MSO practices – in this case Time Warner Cable.

Nearly all of the negative points in the article have to do with TWC, something I suspect a number of TiVo users can sympathize with. First they sent the author on a wild goose chase, telling him he could pay $40 for an install or bring his box in to an office to swap for free. So he lugged his box to a TWC office, only to be told the couldn’t give him a CableCARD and he’d need the install visit anyway. (Thankfully that should be changing August 1st, when self-installs become required.)

So he had the installer come out to do the incredibly difficult task of sticking a card into a slot and calling in a couple of numbers. Of course, the installer failed to show for the appointment and he had to reschedule for four days later. When the installer finally showed up he didn’t seem to really know what to do with a CableCARD, a common complaint. But at least it worked on the first actual install visit.

But that’s not all, TWC told him that his monthly bill would go up by $14 because, despite the CableCARD fee being lower than their DVR fee, he’d lose his bundle discount for having both cable and broadband service through them. This is a new one on me, I’ve never heard of anything close to this. He’s still receiving cable and broadband service, so why should they cancel his service bundling discount? This smells like BS to me. I think the rep was trying to use scare tactics to keep him from returning their DVR. I left a comment (currently pending approval) recommending the author contact TWC corporate to confirm the change in his charges, since that really doesn’t smell right to me.

In the end he seemed to like the TiVo service, but the process of getting it installed understandably left bad impression. And if the $14 bill increase holds true, he’s facing an extra $34/month between the TiVo fees and the increased cable bill. (Yes, I also recommended product lifetime in my comment.) This is a much larger increase than most users would face. Normally you’re looking at an increase in the vicinity of $9-12/month if you go with TiVo’s monthly plan. The TiVo is $19.99/month, but cable boxes are generally around $12.95/month. So that’s $7, and CableCARDs normally run $2-5 a month. Sometimes the first card is free, and sometimes it can be a bit higher – $7.50 or so. But for most users it is within that range.

This kind of incident is why I scoff at the cable industry’s claims that we don’t need any more regulation to create a level playing field for third parties, such as TiVo. The new requirements going into effect next month are a start, but I don’t think we should stop there. We need the FCC to pursue AllVid to further open up the market and allow truly competitive products. The current environment is strongly anti-consumer choice. It is Ma Bell pre-Carterfone.

Yesterday Hank, a reader from Spencer, MA, contacted me to let me know that he’d received a notice in the mail from Charter that they will be switching to SDV on February 2, 2008 and that, as a TiVo user, he could claim a free Tuning Adapter on or after January 5th. Spencer is very close to my home in Worcester, MA, where I also have Charter. I haven’t received the notice yet, but it may well be waiting for me when I return from CES next week. I’m kind of hoping it is, I’d like to get some hands-on experience with the Tuning Adapter to see if it works as well as promised.

And today TVBarn.com is reporting that Time Warner has begun deploying Tuning Adapters in Austin, TX.

It is about time, but it is nice to see this finally getting into the hands of TiVo users to allow them to tune SDV content.

The technology works by allowing viewers to press a button on their remote when a small icon appears on the bottom of the screen. This ‘bookmarks’ the content, or offer, which is then forwarded to a personal website which is incorporated into WTNH.com. I think this is an interesting approach, one I’ve suggested TiVo use for advanced content in the past. Some content is simply better presented on a computer. And this could allow less sophisticated platforms, like a non-DVR cable box, to provide a level of interactive content by offloading it to the website.

Generically, being able to bookmark things on a website would be useful in other ways. For example, a number of Discovery channel shows will say things like “Visit our website for more content/behind the scenes/etc”, and it would be great to be able to push a button on the remote at that point and have a link to the content waiting for you on the PC.

The second press release announced that Time Warner Cable has licensed elements of an Enhanced TV (ETV) platform from Broadband Interactive Applications (BIAP). BAIP’s ETV User Agent will be incorporated into Time Warner Cable’s advanced advertising platform. It will allow TWC’s STB’s to run Enhanced TV Binary Interchange Format (EBIF) applications, both created by TWC and third parties, such as the TV networks.

EBIF is a multimedia content format standard developed by the OpenCable project within CableLabs, which also developed OCAP/tru2way. EBIF is a core element of Canoe, a cable industry effort to develop an advanced advertising platform for all MSOs. Both the cable and broadcast industries will use EBIF to deliver advanced features to cable STBs.

The press releases are below:

LIN TV Announces WTNH-TV and WCTX–TV to Test Backchannelmedia’s TV-to-Internet Click Through Technology

PROVIDENCE, RI and BOSTON, MA, October 27, 2008 – LIN TV Corp. (NYSE: TVL), a local television and digital media company, announced today that its Hartford-New Haven television stations, WTNH-TV ABC Channel 8 and WCTX-TV MyTV Channel 9, will participate in Backchannelmedia’s TV-to-Internet Click Through market trial.

The market trial, set to begin this November, will test Backchannelmedia’s interactive technology with a select group of WTNH-TV and WCTX-TV viewers and advertisers. Backchannelmedia’s patent-pending technology enables viewers to conveniently interact with television ads and programs and bookmark interesting content and advertisers’ offers to view at their convenience.

While watching WTNH-TV and WCTX-TV, participants in the trial will click their TV remote controls on small, non-intrusive icons at the bottom of the viewer’s TV screen to “bookmark” offers on items of interest in local news and entertainment programming. The “bookmarked” content is forwarded to the viewer’s personal web site branded and framed into WTNH.com for easy viewer access and also logged at a data center, providing valuable information for broadcasters and their advertisers.

LIN TV’s new media strategy is focused on partnering with innovative companies, such as Backchannelmedia, to deploy technology that will engage its audiences around LIN TV’s market-leading brands and generate new revenue opportunities. Backchannelmedia’s TV-to-Internet Click Through technology enables LIN TV to engage its viewers, collect valuable data on viewer interaction, drive incremental revenue, and move viewers between LIN TV’s television and Internet channels.

“We are interested in evaluating interactive television applications for our channels. Interactive TV creates unique opportunities for our new media business,” said Robb Richter, senior vice president, new media, LIN TV. “Backchannelmedia’s TV-to-Internet Click Through technology offers viewers a convenient way to interact with our popular television content, which opens the door to a myriad of more advanced marketing opportunities for our advertisers. We look forward to participating in the market trial and strategically evaluating Backchannelmedia’s cutting-edge technology.”

“LIN TV is at the forefront of embracing new media trends and we are confident that we can provide them with new ways to connect with their viewers and advertisers,” said Michael Kokernak, founder and co-chief executive officer, Backchannelmedia. “Our product is one of the best interactive products on the market today and I predict great results from our market trial with WTNH-TV and WCTX-TV.”

About LIN TV

LIN TV Corp., along with its subsidiaries, is a local television and digital media company, owning and/or operating 29 television stations in 17 U.S. markets, all of which are affiliated with a national broadcast network. LIN TV’s highly-rated stations deliver important local news and community stories, along with top-rated sports and entertainment programming.

LIN TV is also a leader in the convergence of local broadcast television and the Internet through its television station web sites and a growing number of local online innovations that reach 15% of U.S. broadband households. LIN TV is traded on the New York Stock Exchange under the symbol “TVL”. Financial information about the company is available at www.lintv.com.

About Backchannelmedia Inc.

Boston-based Backchannelmedia, Inc. (www.backchannelmedia.com) was founded in 2000. Backchannelmedia has developed technology that can be embedded into existing set-top boxes currently found in many TV viewer homes that allows the viewer to forward or “bookmark” their interests from TV to the online world. That interactive technology combined with the Backchannelmedia Portal on the Internet creates a secure link between the TV and Internet platforms. This secure link can be used to create a richer viewing experience for the TV viewer by linking it to content and e-commerce on the Internet.

Backchannelmedia’s opt-in solution answers TV viewer concerns for increased online privacy by extending controls to the viewer for the TV experience. Backchannelmedia’s patent pending technology can be deployed in consumer electronics equipment, TV sets, over the air receivers, cable head-ends, switched digital video and network DVR technologies, direct broadcast providers, as well as a multitude of devices and delivery providers.

Contact:

Courtney Guertin
LIN TV
401.457.9501
courtney.guertin@lintv.com

Terry Frechette
Lois Paul & Partners
781.782.5791
Terry_Frechette@lpp.com

Damon Hunt
Co-Founder
Vice President of Sales
Backchannelmedia, Inc.
105 South Street
Boston, MA 02111
Voice: (617) 728-3626 ext.102
Fax: (617) 517-7777
DHunt@backchannelmedia.com
www.backchannelmedia.com

Oct 28, 2008 08:31 ET

Time Warner Cable Licenses Key Elements of BIAP’s ETV Platform

PLANO, Texas, Oct. 28 /PRNewswire/ — BIAP Inc. announced today that is has reached an agreement with Time Warner Cable for the use of its ETV User Agent in Time Warner Cable’s advanced advertising platform. The five year license agreement will, upon deployment of the software, enable Time Warner Cable digital set-top boxes to run EBIF applications created by the operator or by third parties such as television networks. In addition to supporting third-party EBIF applications, the BIAP ETV User Agent will support Time Warner Cable’s newest MDN navigator.

“The BIAP ETV User Agent is a robust application platform that will serve Time Warner Cable well in the deployment of EBIF and properly support our interactive applications and advanced advertising,” said Mike Hayashi, executive vice president, advanced engineering for Time Warner Cable.

“We are thrilled to open a new chapter in our relationship with Time Warner Cable,” said Tim Peters, BIAP CEO. “This agreement we believe validates our EBIF technology and we thank Time Warner Cable for their pioneering work in the world of interactive television. With the advent of the EBIF standard; their groundwork will lead the entire industry into the new and lucrative world of advanced advertising which depends on the wide deployment of EBIF-enabled set-top boxes. It will also usher in a new era of interactive programming that will allow viewers to participate more and to personalize various aspects of what they are watching.”

EBIF (Enhanced TV Binary Interchange Format) is a multimedia content format standard developed under the OpenCable project of CableLabs. The primary purpose of ETV and the EBIF standard is to enable interactivity to drive viewer engagement and participation. EBIF is one of the key elements of Canoe, the cross-MSO advanced advertising platform currently under development. Both the cable and broadcast industries have fully embraced the EBIF standard as the primary application platform to deliver the long-awaited advanced features across the full range of deployed digital cable set-top boxes, including early generation models with less memory and processing power.

BIAP provides for the industry the three essential elements that will enable interactivity and bring the Canoe initiative to a critical mass of homes. These elements include a standard-based ETV Platform which includes the User Agent, ETV platform server, ETV streamer and a development SDK for EBIF application creation. The second element is a portfolio of applications (EBIF) that enrich the subscriber experience but more importantly allow for the creation of user data critical to addressable advertising. And third is an advanced advertising product called Canoe in a Box which has all the standard-based elements (SCTE-130) that make interactive advertising work including the AdAim™ technology to generate ad targeting information for addressable advertising to the individual homes, while preserving subscriber privacy.

About BIAP:

BIAP (Broadband Interactive Applications) supplies the cable industry with all of the critical tools for interactive television advertising and programming. These tools include the ETV Platform, a broad offering of applications and a complete portfolio of products for advanced advertising. BIAP’s partners include: NBC, eBay, Hearst’s Talking Phone Book, and Rasmussen Reports. Applications in deployment include eBay on TV, Fantasy Football, Yellow Pages on TV and PiTV, a local information service that can be personalized. BIAP is currently available on 24 million set top boxes principally with Time Warner Cable and DISH Network. BIAP has received two patents for its technology and has three Emmy nominations for its applications. Corporate headquarters are in Plano, Texas, with research and development in Sterling, Virginia.

Source: BIAP Inc.

CONTACT: Ellen Cooper, +1-212-777-8353, ellencooper@biap.com, for BIAP

Web site: http://www.biap.com/

As a result Time Warner Cable Oceanic of Oahu and Kauai, HI and Cox in Fairfax County, VA were fined $40,000 and $20,000, respectively. I don’t think this is really going to change anything in the big picture. Cable MSOs aren’t going to back away from SDV, they’re not going to stop deploying it, let alone roll back existing deployments. Perhaps it may spur a quicker pace to Tuning Adapter deployments, but as those deployments, or plans for deployment, are already underway I suspect there won’t be any real world impact.

So the end result is maybe a little karmic payback for MSOs who rushed out SDV without consideration for the FCCs rules or their CableCARD users, and perhaps next time around they’ll give it more consideration. But even that would depend on the FCC levying fines in more territories, in my opinion. The current fines are just too small to have any real impact on the MSOs, the FCC needs to slap the MSOs for all the territories in which they deployed SDV before making Tuning Adapters available.

It does make me wonder, since Tuning Adapters don’t work with all CableCARD UDCP devices (either because they lack a USB port or the firmware to support a TA), is simply offering the TA enough to be compliant with the requirement to provide video to CableCARD devices? Personally I think the effort is there and it should be, it is up to CableCARD device makers to support the TA. Yes, it does mean some early adopters are out of luck, but with CableCARD in use in a very small number of 3rd party devices overall, and many of them capable of supporting a TA (like TiVo), it isn’t going to be a large number of users who are affected.

So, in the end, I don’t think these fines will really change anything, certainly not for end users today.

Is anyone else seeing Time Warner offer Tuning Adapter pre-orders in their area?

That is, of course, if the numbers are true – and they may not be. See the table below and especially the first footnote¹. Comcast’s numbers for September are estimated to be 10-15% lower than actual due to an internal error. We could be looking at an increase of more than 34,000 users instead of only 2,000!

While 34,000 would certainly be better than 2,000, it still isn’t really setting the world on fire. Maybe the M-Card is a ray of hope in those numbers – if customers who previously used two S-Cards are trading them in for a single M-Card on devices like the TiVo HD, it would result in a lower cumulative number. Still, I don’t expect that’s a huge number either.

This is not to say that the total number of CableCARDs in use is that small, not at all. Since the FCC’s ‘integration ban’ went into effect on July 1, 2007, forcing cable MSOs to begin using CableCARDs in their own STBs, those same ten MSOs have deployed over 7,800,000 CableCARDs in their STBs. So in less than fifteen months they’ve deployed more than twenty times the number of CableCARDs as have been issued for 3rd party UDCPs in the four years they’ve been available.

The integration ban was supposed to force cable MSOs to ‘eat their own dog food’ and thereby improve support for CableCARDs. The idea was that this would help foster the overall CableCARD market. Better support from MSOs would lead to more products, which would mean more 3rd party UDCPs in the field. For the most part, this hasn’t happened.

Why not? Well, I think I can sum it up in one brand name: tru2way. Starting late last year, and getting an official launch at CES in January, OCAP became tru2way and marked a push to get consumer electronics companies on board. Then starting with Samsung in May, followed by a larger push by Sony later that month, CE vendors started jumping on the tru2way bandwagon.

What does this have to do with slow CableCARD adoption? Well, these same CE vendors have held off on releasing UDCPs while they work on tru2way-enabled devices. Why invest in developing and marketing a unidirectional product when you’re going to obsolete it with a two-way product in a year? The first tru2way products are starting to trickle out, and there will probably be a bunch of them on display at CES in January. So I think the push for tru2way was a major contributor to lax CableCARD pick up. Vendors just haven’t been releasing CableCARD-enabled products so there aren’t many options for consumers, which naturally means not many cards are being deployed. Really the only major CableCARD product out there right now is TiVo. CableCARD TVs are thin on the ground. CableCARD-enabled Media Center PCs have had anemic sales. And Digeo outright canceled their Moxi CableCARD HD DVR.

CableCARD was slow out of the gate, and by the time MSOs had the infrastructure worked out vendors were already looking toward round two with tru2way and they just decided to sit round one with UDCPs out entirely. The deployment of SDV and the need to develop a Tuning Adapter, and to support it, was very likely a factor in that as well. I don’t expect to see any real pick-up in CableCARD utilization until a sufficient number of tru2way devices are available to consumers, and then I do expect to see a real uptick.

The filing also has information from several MSOs on their CableCARD pricing and install practices. To compare June to September:

¹Comcast states that their September number may by low by 10-15% due to internal reporting errors.

The count for this reporting period of CableCARDs installed in one way retail devices in active customer homes is estimated to be 10-15% lower than the actual number due to internal Comcast reporting errors that are the result of an internal Division reorganization during the reporting period. The next quarterly report will more accurately reflect the actual count.

Since Comcast has such a large installed base this could be the reason for the seemingly small total uptick. The other four combined yield an increase of 3,429. Comcast’s apparent drop of 1,383 drags it down. But if they’re short just 10% they would actually have an increase of 20,334 users. And 15% would mean an increase of 31,192! So we’d be looking at a total increase of 23,763 to 34,621 – rather more than around 2,000. And that’s just from these five MSOs.

²Comcast allows self-installs in at least some areas – 68% used truck rolls, 32% were self-installs.

³First card is free, fee for additional cards.

⁴$10.43 if install is included with other services, $25.14 if purpose visit.

⁵0.2% of Time Warner installs are self-install, which is negligible.

⁶The average is $2.26, but they report most divisions are $1.75 – which must mean the remaining divisions are rather higher to bring the average up.

The Time Warner DVR box model was free, and the service cost $7.95/month. Also I was excited at the possibility of finally getting high definition content on my Sony HDTV. I asked some friends who used it and they seemed happy with it.

But the reality of the situation was not so rosy:

I can sum up my experiences with the Time Warner DVR in one word: Argh!

Ed enumerates the myriad of issues he experienced with the cable DVR in his article at ZDNet. From the terrible button-farm remote with unintuitive controls, to the lack of a priority list for the DVR’s version of Season Passes, to odd quirks during normal use (like the screen blacking when you pause playback and having trouble resuming playback), and more. And it sounds like his family agreed:

After two weeks of this I decided enough was enough. The family all agreed. We wanted TiVo!

Ed considered paying the $150 repair fee, which would really see him upgraded to a Series2DT with his lifetime transferred. But he’d had a taste of HD and native digital cable support, so he instead opted for the TiVo HD. After ordering his new TiVo HD, but before it shipped, TiVo announced the TiVo HD XL.

Knowing a good thing when he sees it, Ed canceled the TiVo HD and ordered a TiVo HD XL.

I think TiVo should send a nice thank you gift to Time Warner and Cisco/Scientific Atlanta for providing such a crappy DVR. The bad experience helped turn a potential lost customer with a dead TiVo into a high-end customer with the latest and greatest TiVo. Cisco’s bad DVR was good for TiVo.

Picked up from TWICE.

Press release below:

Jul 28, 2008 12:03 ET

LG Electronics, Cable Operators Reach Two-Way ‘Plug and Play’ Accord

Pro-Consumer ‘tru2way™’ Pact Clears Path for Video on Demand, Digital Video Recording and Other Interactive Services

ENGLEWOOD CLIFFS, N.J., July 28 /PRNewswire/ — LG Electronics, Inc. today announced the signing of a memorandum of understanding (MOU) with the top six U.S. cable operators, supporting the use of the “tru2way™” technology platform for delivering two-way interactive digital cable services without a set-top box.

“This pro-consumer pact means that LG tru2way HDTVs planned for 2009 and beyond will receive the newest interactive cable services, from video on demand to interactive programming guides, in virtually every media market and without a set-top box. Equally significant, it will facilitate the development of a viable, two-way retail market,” said Dr. Woo Paik, LG Electronics president and chief technology officer.

Developed by Cable Television Laboratories Inc. (CableLabs™), tru2way “plug and play” technology is backed by the nation’s six largest cable companies — Comcast, Time Warner, Cox, CableVision, Charter and Bright House Networks — which together account for an estimated 80 percent of all U.S. cable subscribers and some 105 million homes.

Underscoring the significance of today’s announcement is LG’s role as one of the fastest-growing consumer electronics brands in the United States. A long-time supporter of the CableLabs OpenCable™ initiative, LG Electronics is a leading manufacturer of digital flat-panel displays, digital HDTVs and related digital video products.

Dr. Richard R. Green, president and chief executive officer of CableLabs, said, “With the addition of LG — the latest in a series of MOUs our industry has entered into with leading consumer electronics companies — this again validates our tru2way technology, which employs the same Java-based platform used in mobile phones, interactive broadcasting and Blu-ray HD digital video recorders. Tru2way will allow cable operators, consumer electronics manufacturers, content owners and others to work together to provide creative interactive services directly to the consumer.”

Tru2way technology allows consumers to receive interactive cable services, including video-on-demand, voting and polling, games, and e-commerce in integrated retail DTVs without the need for a separate set-top box.

About LG Electronics

LG Electronics, Inc. is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in 114 operations including 82 subsidiaries around the world. With 2007 global sales of $44 billion, LG comprises four business units — Digital Appliance, Mobile Communications, Digital Display and Digital Media. LG Electronics USA, Inc., based in Englewood Cliffs, N.J., is the North American subsidiary of LG Electronics, Inc. In the United States, LG Electronics sells a wide range of digital appliances, consumer electronics products and mobile phones under LG’s “Life’s Good” marketing theme. For more information, please visit http://www.lgusa.com/.

CableLabs and tru2way are trademarks of Cable Television Laboratories Inc.

Source: LG Electronics, Inc.

CONTACT: John I. Taylor of LG Electronics USA, +1-847-941-8181,
jtaylor@lge.com; or Nathan Friedman of Ogilvy Public Relations,
+1-312-397-6009, nathan.friedman@ogilvypr.com, for LG Electronics, Inc.

Web site: http://www.lgusa.com/

As recently revealed, the new 9.4 TiVo update includes Tuning Adapter support, so TiVo users will be ready for the TAs as soon as the cable MSOs make them available. As Bright House, Cox, Time Warner, and others all implementing SDV, the TAs will be increasingly important. Pricing for customers is not yet known, except for Cox which announced plans to provide the TAs to their customers free of charge.

The current generation of CableCARD-compatible devices sold at retail are only capable of accessing our one-way services. They were not designed to be compatible with SDV, which is a two-way service. As a result, once the channels listed above are migrated to SDV, they no longer will be available to UDCPs. However, Time Warner Cable has worked with the rest of the cable industry and TiVo Inc. to develop an external device called a Tuning Adapter that will allow certain UDCPs, including TiVo Series 3 and TiVo HD digital video recorders, to access channels delivered using SDV.

We expect to be able to offer Tuning Adapters to customers with compatible UDCPs later this year. At that time we will provide you with additional information on availability and device compatibility. It is currently contemplated that the Tuning Adapter will be provided at no additional charge. Until the Tuning Adapter becomes available, however, a Time Warner Cable digital cable set-top box will be required to view channels migrated to SDV – even if you own a Tuning Adapter-compatible UDCP. In addition, certain non-TiVo UDCP models may not work with the Tuning Adapter.

Since The Tuning Adapter is expected to be available starting in July, perhaps they’ll have them available before the August 20th SDV migration. Though one has to wonder, with the Tuning Adapter planned to be available soon, why not just wait to perform the SDV migration until they have them available? Why risk inconveniencing and possibly alienating customers? Corporations move in mysterious ways.

Expect to see more and more of these letters over he coming months as more cable MSOs turn to SDV to add capacity for the growing volume of HD content, as well as additional channels.

The MOU refers to the ‘Founders’ repeatedly – these are the cable MSOs: Comcast Cable, Time Warner Cable, Cox Communications, Bright House Networks, Charter Communications, and Cablevision. New two-way devices are referred to as Interactive Digital Cable Products (IDCP), in contrast to the one-way Unidirectional Digital Cable Products (UDCP). Under the terms of the MOU, the Founders agree to support tru2way on all of their digital cable networks by July 1, 2009 – except for Charter which has until July 1, 2010 to complete their roll-out. The MOU also codifies that the tru2way specifications will be the sole means for IDCPs to access interactive cable services.

While consumer electronics adopters must adhere to the tru2way specifications and license, innovative features that are not specified but that are consistent with the specs and license ‘are allowed and encouraged’. That seems to leave room for innovation, but it remains to be seen how narrowly ‘consistent’ is evaluated. To help ensure solid support for tru2way the cable MSOs have to eat their own dog food, as it were. After July 1, 2009 (again, July 1, 2010 for Charter) the Founders agree that at least 20% of their STBs will support tru2way. That holds until they’ve deployed at least ten million tru2way-enabled STBs. This is to ensure a sufficient install base that the Founders will have a vested interest in ensuring solid support.

Since tru2way is largely a firmware specification, and specifications can evolve, the Founders agree to support any given version of the tru2way Middleware used by an Adopter’s product for five years from the date of that version’s first certification. So, in effect, that should guarantee a minimum product life of five years. Of course, it could easily be longer as Adopter’s products could receive firmware updates, and the Founders could support a Middleware version for longer than five years. Clearly it would be up to the Adopter, the CE vendor, to provide updates to newer tru2way Middleware versions, which is only fair. And to help ensure that is possible, there is an equal access provision in the MOU. Any given tru2way Middleware revision will be available to Adopters at the same time it is available to Founders. So the MSO’s won’t have any unfair advantage in being able to bring newer features to market first.

As for guide data, which was long a bone of contention over OCAP, any Founder’s digital cable system which carriers a CBS broadcast signal (which is pretty much all of them) which contains the Gemstar-TV Guide EPG data and where that Founder has an agreement covering the Gemstar data, must not block or remove said data from the CBS signal. In English? Well, Gemstar-TV Guide has an agreement with CBS to carry their EPG data. This data is used by a number of TVs, VCRs, DVRs, DVD Recorders, etc, to provide a simple on-screen EPG. The data is carried in the VBI, the vertical blanking interval, and are not part of the video itself. This has been an issue in the past as some cable MSOs have stripped out this data from the broadcast when processing the network feed for redistribution, hence making it inaccessible to CE devices that rely on it for their EPG.

So this agreement means that the Founder agree to not block or strip the data, when it is carried by the local CBS affiliate and they can legally do so, of course. This provides CE vendors with a data source for a ‘native’ EPG, as opposed to relying on the tru2way MSO-provided EPG, or a out-of-band EPG downloaded separately, as in a TiVo. The broadcast EPG does generally lack the full level of detail found in a downloaded EPG, or even the MSOs EPG, but it has the advantage of being readily available in the received signal and gives the CE vendor the ability to process and use the data as they wish, unlike the tru2way guide which comes as-is.

While the agreement seems to treat tru2way as the primary means of navigation, Adopters are free to overlay their own ‘native’ navigation with four prerequisites: 1. It must be initiated by the user each time (such as through a remote action), 2. it must be only for navigation (no ads, etc), 3. It must be transitory (sounds like once the action is complete it should return to tru2way-mode), and 4. it must appear the same on all channels. So no special ABC navigation screen that isn’t used on NBC, etc.

There is a ‘sunset’, or exit clause for the MOU. Starting July 1, 2009, if fewer than 500,000 new retail IDCPs are connected to the Founders’ networks within any given 24 month period then the Founders are no longer bound by the MOU. Basically, if the Adopters, the CE vendors, don’t hold up their end of the bargin and produce enough IDCP devices, then the cable MSOs are no longer bound to spend their money supporting tru2way on their networks and they’re free to stop, try something else, etc. Considering the number of TVs, DVRs, etc, sold at retail in this country each year, this shouldn’t be a problem – if and only if the CE vendors step up and start tru2way-enabling a sufficient number of device models. So the ball is in their court.

Licensing for the IDCPs will be under the existing CableLabs licenses, with some amendments. Certification of devices will be through CableLabs IDCP testing. Once a vendor has had five mutually agreed upon devices certified by CableLabs, then they are eligible to self-certify future devices. This is one of the compromises in the agreement. CE vendors didn’t want the expense and hassle of going through CableLabs for each new product, while the cable industry didn’t want the potential havoc caused by bad devices being connected to their networks. So now once a vendor has proven their competence level through CableLabs certification, they can be free of that requirement.

Under the MOU CableLabs will establish a Founders Advisory Board (FAB) which will apparently serve as a kind of arbitration group when changes to the tru2way hardware specification are proposed. As the board is currently specified there are nine votes – one for each of the Founders, and one for the CE Adopters as a block, one for the IT Adopters as a block, and one for the content providers as a block. That means that, should they vote in unison, the cable MSOs would always carry a majority. And you’d actually need two MSOs to break ranks and vote with the other blocks to swing the majority. But the vote is also only advisory and non-binding, so I’m not sure what it is in aid of other than as an opinion poll for the parties involved. And, of course, the FCC still has final say in the end.

CableLabs also agrees to approve or disapprove any new digital output system or content protection system within 180 days of the proposal being submitted by an Adopter, on a ‘reasonable and nondiscriminatory basis’. This will probably come into play with technologies akin to TiVo’s TiVoGuard, which protects TiVoToGo transfers. As CE vendors look to innovate and develop whole home distribution systems, etc, there may be new technologies developed to satisfy the rights holders that their content is being protected. And if CableLabs disapproves the technology, or simply fails to act within 180 days, then the Adopter can appeal to the FCC which is expected to handle the appeal in a 90-day process. Remember that a while back the NFL and MPAA tried to block TiVoGuard and TivoToGo, but the FCC approved it.

But there’s another way to get a new technology approved. If four members of the MPAA agree that the new system provides adequate content protection, then that technology will be automatically approved by CableLabs.

If tru2way is sunset and CableLabs defines a successor to CableCARD or tru2way (such as DCAS) then Adopters who are party to the MOU may participate in the development of the successor.

The definitions have some interesting tidbits. Under the MOU, ‘Digital Cable System’ only covers systems with one or more QAM channels, operating with a capacity of 750MHz or higher and with a minimum of 5,000 basic cable subscribers.

Not a lot of information, really, but it is clearly a compromise with some give and take by both the cable MSOs and the consumer electronics vendors, which is what we needed to un-roadblock two-way cable development. It is interesting that Charter gets an extra year to complete their tru2way roll-out, compared to the other five Founder MSOs. I guess Charter must be further behind in their progress than the others. Of course, I just happen to currently reside in Charter territory. Note though that the dates are for completion of deployment, some areas already have tru2way support and many more will before the year is out.

Their press release:

Contact:
Mike Schwartz
CableLabs
303-661-9100
m.schwartz@cablelabs.com

FOR IMMEDIATE RELEASE

Cable Tru2way™ Platform Gains Endorsements from Major CE and IT Companies

ADB, Digeo, Intel, Panasonic, Samsung, and Sony sign Accord with Cable Industry

Louisville, Colorado, June 9, 2008 — Major consumer electronics (CE) and information technology (IT) companies have signed binding memorandums of understanding (MOU) on tru2way™ technology with the top six cable operators in the United States.

Companies that have signed to date now include consumer electronics manufacturers Panasonic Corporation of North America, Samsung Electronics America, and Sony Electronics. Other companies signing include set-top makers ADB and Digeo, and chip manufacturer Intel Corporation.

As previously announced, Intel plans to build a system-on-a-chip (SoC) that will support a variety of tru2way devices, including DTVs, set-top-boxes, DVRs, and other devices.

The cable operators that have announced support for the tru2way platform on their networks are Comcast, Time Warner, Cox, Cablevision, Charter and Bright House Networks, together representing over 80 percent of all cable subscribers and 105 million homes passed.

Glenn Britt, President of Time Warner Cable said, “Tru2way technology will allow the industry to continually enhance the customer experience, ensuring that the latest features and technology are available to our customers nation-wide. Time Warner Cable has already distributed nearly a million tru2way devices, and this agreement further supports the industry’s efforts.”

Dr. Richard R. Green, President and CEO of CableLabs, said: “This is a momentous achievement that again validates the tru2way technology platform for delivering interactive digital cable services to wide variety of devices. We stand ready to support the cable operators and the manufacturers in the rollout of tru2way devices for the benefit of our mutual customers,” he added.

The multi-industry agreement is embodied in a joint MOU that supports and endorses the tru2way technology platform developed by CableLabs® for delivering 2-way interactive digital cable video services. Detailed terms of the MOU have not yet been released while other potential signatories complete their review of the document.

Tru2way technology creates a national footprint for the creators of interactive services to develop products that work on cable systems in nearly every U.S. market so that consumers who purchase digital cable ready devices will be able to receive new and innovative interactive cable services now and in the future. The platform uses the same popular Java-based technology that is used in cell phones, interactive broadcasting and high-definition Blu-ray Disc players, and brings a large developer community that allows networks, content owners, cable operators, and manufacturers to develop creative interactive services that can be provided directly to cable customers.

About CableLabs

Founded in 1988 by members of the cable television industry, Cable Television Laboratories is a non-profit research and development consortium that is dedicated to pursuing new cable telecommunications technologies and to helping its cable operator members integrate those advancements into their business objectives. Cable operators from around the world are members. CableLabs maintains web sites at www.cablelabs.com; www.packetcable.com; www.cablemodem.com; www.cablenet.org; and www.opencable.com.

“Right now it’s pretty hard to get Internet stuff on your TV,” [Chief Executive Glenn Britt] said at the Sanford C. Bernstein Strategic Decisions Conference in New York.

“We’re actually going to have equipment we make available to subscribers,” he said. “It’s actually going to be a new wireless cable modem that will allow you to network everything in your house.”

Britt gave few specific details on how the service would work or when it would be available.

“Within a relatively short time … it’s going to be very easy to get Internet TV on your big screen TV,” he said, estimating it would take between one to two years to popularize such technology already sold by the likes of Apple Inc.

This is definitely a growing market with products like TiVo, Apple TV, Roku’s Netflix box, DivX Connected boxes, etc. Being able to provide access to online content will help cable MSOs compete with the consumer electronics vendors. It remains to be seen how Time Warner will handle the access, how open it will be, and which content formats it will handle.

So it looks like OCAP/tru2way will end up the industry standard, and the DCR+ push is likely to fade away now. The full terms of the Memorandum of Understanding that covers the agreement have not yet been released, giving other potential signatories time to review it. I’ll keep an eye out for those terms once they’ve been released.

I’m just glad to see an apparent end to the stalemate. If the CE industry in general embraces tru2way then it opens the floodgates for more advanced cable products for consumers, which is a good thing.

The press release announcing the agreement is below.

FOR IMMEDIATE RELEASE

Sony Electronics and Major U.S. Cable Operators Negotiate National “Two-Way” Plug and Play Solution

Agreement Establishes Platform for Retail Devices to Receive Interactive Cable Services

WASHINGTON, DC, May 27, 2008 – Sony Electronics and major cable operators which together pass over 105 million U.S. homes have negotiated and signed an agreement that will enable consumers to purchase innovative “two-way” digital televisions and other devices that can receive interactive digital and high-definition video services without a set-top box, Sony and the National Cable & Telecommunications Association (NCTA) announced today. The terms of the agreement are embodied in a binding Memorandum of Understanding (MOU) negotiated by Sony Electronics and the six largest cable companies – Comcast, Time Warner Cable, Cox, Charter, Cablevision and Bright House Networks – which serve more than 82 percent of all U.S. cable subscribers.

Other consumer electronics companies will be beneficiaries of this new national two-way “plug-and-play” platform and have also been invited to formally join the MOU.

This negotiated industry agreement establishes the fundamentals for a competitive retail market for “two-way” digital cable-ready devices. It addresses how such products will be brought to market with interactive services like video-on-demand, digital video recording and interactive programming guides.

In addition, the agreement makes it clear that consumers will be able to enjoy a choice of differentiated two-way products at retail and through cable operators from a variety of consumer electronics and information technology manufacturers. The agreement includes safeguards to facilitate the development of a robust, two-way retail market and to ensure that cable operators can continue to develop and offer new competitive services.

Representative Rick Boucher (D-VA), a senior Member of the House Energy and Commerce Committee and one of the leading advocates in Congress for new technology and consumer freedoms said: “I congratulate Sony and the major cable operators for achieving consensus on a set of core principles that will speed the introduction of new two-way plug-and-play devices.” Representative Boucher added: “With this groundbreaking compromise, these industry-leading companies and other major cable companies will ensure that consumers will have broader access to innovative competitive cable ready navigation devices from commercial retailers and will have expanded options to enjoy cable programming, including video on demand and other interactive programming options.”

As part of the agreement, the parties will adopt: the Java-based “tru2way” solution as the national interactive “plug-and-play” standard; new streamlined technology licenses; and new ways for content providers, consumer electronics manufacturers, information technology companies and cable operators to cooperate in evolving the tru2way technology at Cable Television Laboratories (CableLabs), the cable industry’s research and development consortium.

The agreement will encourage the development and distribution of interactive and high-value digital content. Key elements of the agreement relate to the deployment of a platform for “write once, run anywhere” applications, and to the incorporation of secure digital interfaces that protect consumers’ home recording rights along with copyright owners’ rights to secure their digital content. Detailed terms of the MOU have not yet been released, while other potential signatories complete their review of the document.

“This marketplace agreement is good news for consumers,” said Edgar Tu, Sony Electronics’ Senior Vice President of TV Operations of America. “A national plug-and-play digital cable standard for interactive TV receivers, recorders and other products that is transferable and viable wherever you live is ideal for today’s mobile society.”

“This is a landmark agreement which will provide a national, open and interactive platform resulting in more choices of services and products for consumers,” said Kyle McSlarrow, NCTA President & CEO.

“We are pleased that this technical challenge has been addressed through a voluntary, private-sector solution,” said Consumer Electronics Association President and CEO Gary Shapiro. “We look forward to working with our cable colleagues to ensure Americans across the country have access to high value cable content while using the equipment of their choosing.”

###

NCTA is the principal trade association for the U.S. cable industry, representing cable operators serving more than 90 percent of the nation’s cable television households and more than 200 cable program networks. The cable industry is the nation’s largest broadband provider of high-speed Internet access after investing more than $130 billion to build a two-way interactive network with fiber optic technology. Cable companies also provide state-of-the-art digital telephone service to millions of American consumers.