The FCC is addressing the failure of CableCARDs, which allow non-cable company provided devices to access their networks, in its National Broadband Plan, an ambitious goal to connect all Americans to fast broadband service. The plan takes further steps to encourage development of the home gateway, a device in which consumers can easily and seamlessly access video programming from all distributors.
In a proposed Network Gateway-NOI, (a Notice of Inquiry seeking comment on best approaches to assure the commercial availability of smart video devices and other equipment used to access the services of multi-channel video programming distributors), and CableCARD NPRM, (Notice of Proposed Rulemaking that proposes changes to the CableCARD rules for set-top boxes used with cable services, to improve the operation of that framework pending the development of a successor framework), the commission is seeking input on how to best rework the CableCARD rules to make set-top boxes (STBs) more universal in nature and easier for consumers to connect and network throughout the home to any video provider offerings. The question remains — is the FCC suited to take on another attempt to create competition within the set-top box market? Or should it leave this to market forces?
A Universal Provider Gateway Concept Could Be Flawed
Most, if not all, video providers want control of the user experience in their set-top boxes or proposed gateways, and are not willing give up that control universally. That means each provider wants to create its own gateway and hearkens back to the premise of why CableCARDs did not work. Companies are not willing to share the proprietary customer relationship with other competitors. This is why only a few set-top boxes are in the market. Cable companies created their own devices to offer video content to customers, while investing billions to do so; but as market forces continually change the demand for a more competitive STB/Gateway continues to emerge. (See FCC to “improve” CableCARD rules this month)
A Sub-Market of Over-The-Top Competitors
With the advent of Hulu and YouTube along with Netflix, Apple TV, Roku, Blu-Ray, and Xbox, the concept of a possible competitive residential gateway, or STB if you prefer, has taken hold. Video programmers have accepted these non-traditional video providers as a new pipeline to distribute their wares. See (Park Associates blog) But should these companies be looking to themselves to have unique home gateways built for home distribution which will connect consumers with mainstream video, Internet, and phone services? I think so, and this also means contracting with an Internet service provider/video provider/telephony-wireless provider for a residential service interface to their STB. This may be easier said than done.