NCTA counters CEA claims on set-top ban

[Gregg Lengling]

The National Cable & Telecommunications Association shot back this week in its ongoing argument with the Consumer Electronics Association about a coming ban on cable set-tops with integrated security.

The CEA favors the ban, set to take effect on July 1, 2006. The NCTA wants the Federal Communications Commission to postpone it 18 months or drop it altogether. If it goes through, all set-tops will have to be outfitted to handle removable CableCARD security modules, already used to support one-way cable services and eventually two-way services in set-top-free "Plug & Play" digital TV sets.

In a nine-page ex parte with the FCC, the NCTA countered several arguments that the CEA has used to solidify its position on the matter.

Chief among them is CEA's assertion that only uniform support from the cable industry of the CableCARD will drive costs down to commodity levels. NCTA, reiterating a point it made in a Dec. 20 letter, argued that the CEA is incorrect in that assumption, pointing out that hardware is just one of many costs operators must bear to support the CableCARD.

NCTA also pointed to "licensing, warranties and indemnification, and underlying security" costs that may not be reduced over time like the CableCARD hardware itself might. NCTA added that an integration ban will cost MSOs "hundreds of millions of dollars in additional equipment costs" even when using the CE industry's estimates of CableCARD costs.

Earlier this month, NCTA President & CEO Roberts Sachs requested that FCC Chairman Michael Powell host a face-to-face meeting with cable and CE representatives in order to "clarify a number of issues" as the FCC mulls whether to maintain, eliminate or postpone the ban.