Changes in consumer premises equipment (“CPE”) technology have an important impact on competition in the video programming market. CPE is the necessary means by which consumers access the services that broadcasters, MVPDs, and OVDs provide. Because CPE is an integral part of viewing video programming, CPE features such as recording, home networking, and user interface are factors to consumers when choosing their programming provider and which services to purchase. Further, interoperability of CPE can impact the ability to consumers to seamlessly switch providers. In this section, we report on a number of developments in this area that affect the manner and state of competition in the video marketplace. We specifically note, where possible, developments since the last report, and examine the technological, regulatory and market developments that have had an effect on or are likely in coming years to affect competition in the video market. We begin by summarizing navigation device developments by MVPDs and by non-affiliated vendors. We then review developments in devices used to access online video and mobile video services.
1.CPE Used to Access MVPD Services.
MVPDs have been deploying set-top boxes that allow consumers to move content among other MVPD-provided set-top boxes in the home and incorporating cable modems into set-top gateways. MVPDs are also providing video to portable screens, such as Internet-connected smart phones and tablet computers. Cable companies continue to support CableCARD and, as described in more detail below, are working to implement an IP based recordable output.139
MVPDs have widely begun deploying multi-room DVR and home networking solutions. Comcast’s “AnyRoom DVR,” AT&T’s “Total Home DVR,” and DIRECTV’s “Whole Home DVR” are current examples of MVPD-provided services that move recorded video content among MVPD-provided set-top boxes in the home. DIRECTV’s multi-room DVR provides full DVR capabilities on other DIRECTV set-top boxes connected to a central HD DVR in a consumer’s home.140 Similarly, DISH Network’s DuoDVR receivers allow two independently controlled televisions to be connected to the same set-top box.141 In addition, DISH Network’s TV Everywhere service streams video from a consumer’s set-top box via IP to a remote computer, mobile device, or “WiFi Monitor.”142 The DISH Network WiFi Monitor is a portable HD monitor with built-in wi-fi and a streaming receiver. This remote viewing service works both inside and away from the consumer’s home.
Some MVPDs are deploying cloud-based user interfaces that take advantage of IP connectivity in leased set-top boxes. For example, Comcast’s Xfinity TV uses a cloud-based interface that allows subscribers to search content from live television, on demand, or on their DVRs, in addition to providing access to weather and traffic applications, and social networking features.143 Comcast has also begun a trial of a more robust IP based program guide and video delivery platform that targets delivery to IP enabled devices.144 Time Warner has started to implement a cloud-based user guide providing improved search and navigation features through its set-top boxes equipped with a DOCSIS IP connection.145
Additionally, MVPDs have been working on ways to expand access to their services by retail products.146 For example, DIRECTV is a founding member of the “RVU Alliance,” which has developed open-standard technology that permits the distribution of video programming directly to televisions and other devices throughout the home from IP-enabled gateway devices. Portable media players, gaming consoles, and Internet-connected smart phones and tablet computers have become popular ways to interact with video as well. While an increasing number of these devices can access many MVPD services, the AllVid Tech Alliance asserts that few devices from non-affiliated vendors can access MVPD services.147
b.CableCARDs and Section 629 of the Communications Act
Pursuant to Section 629 of the Act,148 the Commission adopted regulations to assure the commercial availability of consumer electronics equipment that can access MVPD services.149 In enacting the section, Congress pointed to the vigorous retail market for CPE used with the telephone network and sought to create a similarly vigorous market for devices used with MVPD services.150 The Commission has made regulatory efforts to develop this market and continues to analyze marketplace developments.
In 2003, the Commission adopted CableCARD standards that make cable service compatible with consumer electronics devices.151 These standards direct cable operators to separate the conditional access152 functions of a set-top box from the box’s other functions, like tuning and guide rendering (i.e., drawing the image you see when you push the “guide” button on your remote).153 This separation requirement is commonly referred to as the “integration ban.” CableCARDs permit the reception of digital cable programming via commercially available devices without using a cable operator supplied set-top box. Consumers, however, must obtain a CableCARD from their local cable operator to insert into digital television sets, competitive set-top boxes (e.g., TiVo) or other devices they have purchased at a retail outlet. While the CableCARD-compatible devices available at retail today are only capable of receiving one-way cable service, operator-supplied set-top boxes using CableCARDs are capable of two-way communication with the headed.154
Despite the CableCARD standards, consumer adoption of retail CableCARD-compatible devices has not matched the Commission’s expectations.155 The following table shows the reported number of CableCARD deployments for use in retail CableCARD-enabled devices since 2006156 and the deployment of operator-supplied set-top boxes with CableCARDs since the integration ban went into effect on July 1, 2007.157
CableCARD Deployment for Use in Retail Devices – Top 10 Cable Operators
Operator-supplied Set-top Boxes With CableCARDS
While our CableCARD rules have allowed vendors like TiVo and Hauppauge to build retail devices that connect to cable systems, the cable industry criticizes the CableCARD regime as expensive and ineffective.159 Non-cable MVPDs insist that CableCARDs are too cable-centric, and that future standards should consider that their systems differ from cable systems.160 According to certain public interest and local government entities, disagreement in the industry about the best mechanism to achieve a competitive retail market for CPE devices has limited the choices available to consumers.161
In October 2010, the Commission adopted rules to eliminate four impediments to consumer adoption of CableCARDs, including rules that: (1) ensure that retail devices can access all video programming that is prescheduled by the programming provider; (2) increase transparency in CableCARD pricing and billing; (3) streamline CableCARD installation; and (4) streamline requirements for manufacturers who build CableCARD devices.162 In the same order the Commission replaced the IEEE 1394 connector that was meant to be a recordable digital output from MVPD leased set-top boxes with an IP based open-standard connection with certain requirements in service discovery, video transport, and remote command pass-through for home networking. Beginning December 1, 2012, cable operators must deploy set-top boxes that meet the IP-based output requirement. Once that requirement takes effect, retail-purchased CPE will be able more effectively to network with and view content from MVPD-provided devices.
The Commission and industry have undertaken several efforts to update, extend, or replace the CableCARD regime.163 Most recently, the Commission has begun exploring a replacement concept referred to as “AllVid.” The AllVid NOI introduced the concept of an adapter that could act either as a small “set-back” device for connection to a single smart video device or as a gateway allowing all consumer electronics devices in the home to access multichannel video programming services in addition to any other services the devices might have access to.164 Unlike CableCARD technology, this adapter could support the development and marketing of retail smart video devices that attach to any MVPD service anywhere in the United States. Such an approach could greatly enhance the incentives for manufacturers to enter the retail market. As conceived, an MVPD would supply an adapter that would communicate with the MVPD service, perform the tuning and security decryption functions that may be specific to that particular MVPD, and deliver video to retail devices using a common home networking protocol. In this manner, a retail smart video device would be able to integrate MVPD and non-MVPD services, perform navigation functions, including the presentation of programming guides and search functionality. The Commission is continuing to monitor and evaluate the market for devices that can access MVPD services.
2. CPE Used to Access OVD Services
Increased broadband speeds will allow consumers to receive IP-delivered video content within the home across multiple broadband-capable devices, game consoles, and standalone devices like those provided by Apple, Roku, Boxee, and Google.165 These devices allow users to navigate and receive video delivered via broadband Internet and display it on a television monitor. In the OVD section of this Report, we note that many of the leading OVDs make their services available via a wide variety of consumer electronics products. The converse is also true – many consumer electronics products give consumers access to a variety of OVD services.
Vendors have also begun to integrate and blend linear television service from MVPDs and broadcasters with OVD services. For example, Boxee’s LiveTV is a digital television tuner peripheral that connects to Boxee’s media player, where the over-the-air broadcast television signals are presented to consumers alongside OVD services.
The proliferation of portable media devices with broadband IP capability has opened up new video distribution opportunities for MVPDs and OVDs alike. Devices such as laptops, netbooks, smartphones and media tablets all have IP connections and high resolution screens for consumers to watch video. Gartner, Inc. projects that over 100 million media tablets will be sold worldwide by the end of 2012.166 The number of smartphones with 4G connectivity is on the rise as well, which enables video providers to potentially deliver high quality video to viewers.167 To access the mobile IP market, MVPDs have begun making their video content accessible over a host of portable devices. For example, Comcast’s XFinity TV service provides on-demand video to laptops, smartphones, and tablets.168 DIRECTV’s “nomad” service allows consumers to copy recordings from their HD DVR to their phones, laptops, or tablets for viewing without an active network connection. To facilitate these services, MVPDs and programmers are looking to cloud-delivery mechanisms for IP connected devices including, tablets, smartphones, televisions, laptops, and other mobile devices.169
b.Specialty Mobile Devices
For the purposes of this Report, specialty mobile devices are those that include specialized hardware to receive mobile video services from the mobile provider’s network, as opposed to those that receive mobile video via the Internet. Such devices often have the advantage that they are served by a broadcast or point-to-multipoint system, so they do not consume data from a data plan, and many devices can receive content simultaneously in a crowded location such as a stadium or arena. However, the specialized hardware needed to access the mobile video services requires vendors to design devices for a specific service, potentially restricting the number of services than can be accessed by a device, and diminishing the willingness of vendors to build devices that support the service.
Since the last report, mobile providers have continued to experiment in ways to send broadcast video programming to mobile devices. For example, MediaFLO was an attempt by Qualcomm to broadcast video to mobile devices. MediaFLO receivers were built into a range of Verizon Wireless handsets, which Verizon utilized for its VCAST service.170 However, with the growth of IP connected smartphones, Verizon Video is now delivered over IP, and the specialized MediaFLO reception hardware is no longer necessary or included in handsets. The MediaFLO network was shut down in late 2010, and Qualcomm sold the spectrum to AT&T. ATSC Mobile/Handheld (“ATSC M/H”) receivers have appeared in the market, mostly in the form of USB tuner peripherals that connect to personal computers.171 These USB receivers allow consumers to view ATSC M/H broadcasts on their laptops.172 Driven by industry groups like the Open Mobile Video Coalition (“OMVC”),173 some smartphone manufacturers have announced plans to include the hardware needed to receive ATSC M/H broadcasts in their products beginning in late 2012.174 MetroPCS will offer handsets made by Samsung that include ATSC M/H reception hardware.175 The resulting increase in specialty receiver penetration could allow mobile broadcast video services that rely on ATSC M/H specialty receivers to succeed where the previous attempts have been unsuccessful.
In order to compete in the mobile video marketplace by delivering video over their own networks, satellite-based providers face technical challenges such as antenna size, weight, and ability to track satellites while in motion. Because they must be larger than would typically be found in a handheld device, mobile satellite-based devices are more often are integrated into passenger vehicles. Several companies have attempted to introduce mobile video services targeted toward family-sized passenger vehicles. CruiseCast, a joint service of AT&T Inc. and RaySat Broadcasting Corp., began service in June 2009, but in November 2009 ceased activating new customers and refunded existing customers for equipment purchased.176 ICO mim (mobile interactive media) launched its North American geosynchronous satellite in 2007. ICO had planned to provide interactive mobile video, navigation, and emergency assistance, but does not appear to have expanded beyond trials begun in 2009.177 SiriusXM’s Backseat TV continues to operate, offering three family-oriented channels – Nickelodeon, Disney Channel, and Cartoon Network. Backseat TV can be purchased pre-installed in several vehicle models, with controls integrated into the vehicle’s audio head unit.178