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Strong Sell
Read it and weep dreamers!!Now that Latta's Bill has passed the house and will almost certainly pass Through Senate, it's OVER for Cable Card and companies that are leaching off of Cable Companies. Zinn can Whine all he wants, it's over Johnny!! Sell while you can Sheeple!! http://www.warren-news.com/cablecards.htm << Two-Front War Against CableCARDs Escalates on the Hill, Ongoing at FCC A two-front war against CableCARDs is escalating on Capitol Hill and is also taking place at the FCC. The cable industry has fought to end the cable integration ban, as players such as TiVo seek to save it amid lobbying and concerns. The integration ban calls for cable operators to use CableCARDs instead of built-in security in set-top boxes. Neither the cable industry nor CableCARD advocates in the consumer electronics industry said they know the feelings of FCC Chairman Tom Wheeler on TiVo's effort to have the agency bring back encoding and CableCARD support rules struck down by the EchoStar court decision early this year. A House bill proposing to kill the integration ban is still a toss-up in the Communications Subcommittee, said a Hill aide and industry officials. Subcommittee Vice Chairman Bob Latta, R-Ohio, wrote the legislation, but ranking member Anna Eshoo, D-Calif., appears unreceptive, and TiVo has lobbied hard to kill the bill. Multiple parties said the bill's backers want to see its provisions integrated into the Satellite Television Extension and Localism Act, which will expire at the end of 2014. Removing the requirement for CableCARDs would be "plainly anti-consumer" because it will hamper the FCC's ability to encourage the cable industry to move to a superior video standard that would work for both cable companies and retail set-top box makers, said TiVo General Counsel Matt Zinn. "They want to move on and they don't want to share." " I'd like to find a vehicle, if it can't be a stand-alone, to move forward on this," Latta said during C-SPAN's The Communicators, telecast Saturday. "I'd like to see my legislation on the CableCARD be enacted." When asked about TiVo opposition, he stressed the changing industry and said his bill will help consumers. Latta introduced HR-3196 in late September with Rep. Gene Green, D-Texas. Since then, the bill acquired a handful of co-sponsors: John Shimkus, R-Ill., John Dingell, D-Mich., Ed Whitfield, R-Ky., and John Barrow, D-Ga. Eshoo strongly opposes Latta's bill, an aide to a different Democratic subcommittee member -- who has not taken a position on the bill -- told us. Eshoo is the only member of the subcommittee to publicly come out against the bill, the aide added. Eshoo's staff was unavailable to comment, but staff has previously pointed to Eshoo's opposition to Latta's bill draft (CD Sept 30 p6). The other member's aide said he would be surprised if the Latta bill moved at all, citing members unlikely to take a strong stance unless subcommittee Chairman Greg Walden, R-Ore., decides to. The aide confirmed the bill's strong support from cable and opposition from TiVo. Latta may drop the bill as a STELA amendment, but Walden has often emphasized his desire for "clean" STELA reauthorization, the aide said. Commerce Committee ranking member Henry Waxman, D-Calif., has not taken a public position on HR-3196, an aide to Waxman said. STELA Endgame? TiVo sees a STELA endgame. The bill's backers "clearly have a strategy to put this on STELA" but it's unclear "whether [Walden] wants a clean STELA or not," said TiVo lobbyist Kim Bayliss, managing principal at Grayling. She expects that debate to be kicked off in Q1. "The Latta bill is a very cynical bill," TiVo's Zinn, in Washington last week for Hill and FCC meetings, told us. Zinn and Bayliss confirmed Eshoo's opposition and pointed to Eshoo's backing of Communications Act Section 629, which helped create the CableCARD. Eshoo is "protective" and "proud" of that section, "a huge priority for her," Bayliss said. The bill includes a provision outlining the FCC's preserved authority under this section. TiVo's headquarters are just shy of Eshoo's district, though Zinn is personally her constituent. The bill will probably be included in a larger package, but no decision has been made about any particular vehicle, such as STELA, Latta Chief of Staff Ryan Walker told us. It's possible the bill would advance as a stand-alone measure, and Latta is deferring to Walden on what should be included in any STELA draft, Walker said. Walden plans to release a STELA draft Q1, which a committee aide last week confirmed is still the target. "We've been diligently working on getting co-sponsors in a bipartisan manner," added Walker, in an "evenhanded way." He expects a few more may be added once the House resumes business Dec. 2. If the Latta bill is successful, it could make it very difficult for consumers to buy retail set-top boxes instead of those provided by cable companies, said Zinn. Without universal support for CableCARDs, prices for retail set-tops will rise, he said. As cable technology advances, it's likely cable companies would stop providing their content in a format that retail set-tops could decrypt, said Zinn. Although retail set-tops produced by TiVo or Google might have desirable features for consumers, "if you don't get all the cable channels, nobody is going to buy it," he said. The lack of a CableCARD requirement would hinder the FCC's ability to fulfill the Communication Act requirement that the agency ensure competitive availability of navigation devices, said Public Knowledge Senior Staff Attorney John Bergmayer. The promise of dropping the requirement is the only card the FCC has to play to encourage movement to a new video standard, said Zinn. "There's zero incentive for the industry to produce a new standard if the integration ban goes away." The integration ban's removal wouldn't affect the cable industry's support of CableCARDs, said NCTA General Counsel Neal Goldberg. "Those boxes belong to our customers," said Goldberg, pointing out that consumers want to use TiVo boxes to view cable content. Goldberg said even if the CableCARD support rules aren't reinstated, and the integration ban is struck down, the cable industry would be bound by an FCC rule to provide separable security for set-top boxes, which would likely encourage continued support of CableCARDs. The sheer volume of CableCARDs already in set-top boxes will also prevent Zinn's predictions from coming true, said Davis Wright cable attorney Paul Glist, who represented Charter in its application for a CableCARD waiver. "The last time the FCC looked at this issue, there were 21 million leased boxes with CableCARDs in them –- today there are twice that many." After so many years with the requirement, support for CableCARDs has been "built into the business plans" of cable providers, Glist said. "If you want common reliance, you've got it in spades." TiVo's Lobbying TiVo has lobbied across the House Commerce member offices, Bayliss said. "The committee kind of comes down not in a partisan way, but in an industry way -- you're either for incumbents, or you're for competitors," she said, saying members backing Latta "have historically supported incumbents," either telco or cable. "When we go into offices, the thing that really strikes people is that consumers are paying $7 billion, conservatively, a year to lease set-top boxes from their cable operators," Bayliss said, describing "eyes popping" at the figure and insisting consumers have another choice. "Consumers don't know they have a choice," Zinn said. "One office we talked to that is a co-sponsor of the legislation just flat-out said, 'We don't really like Anna Eshoo's constituents. We don't like the tech companies,'" Bayliss said. "Well, if that's your position, it's really easy." She said TiVo has met with Republicans who seem especially receptive to the message of clearing regulatory underbrush. Walden recently described "some discussions" about Latta's bill, but "the video marketplace has changed a lot, and the question is what vehicle do you do that in, if you do that at all," speaking during a press meeting (CD Nov 18 p5). "Those decisions haven't been made yet." Latta said there have been "extensive conversations" with Walden. "When you put this integration ban in, what happened of course was it's actually costing about $56 more per box to do this," Latta said. "It's cost consumers and everyone in the industry about a billion dollars." Latta's figure of $1 billion counts the costs since 2007 and was an NCTA talking point when the bill was introduced. Neither this figure nor the TiVo talking point of $7.5 billion in annual leasing costs could be immediately traced to outside studies. Broader Lobbying Concerns Latta's bill attracted a wide swath of lobbyists. NCTA spent $4.44 million lobbying Congress in Q3 and specifically cited HR-3196 among its priorities, as did Time Warner Cable in its quarterly disclosure report listing $1.96 million lobbying expenses. Comcast, while not specifically naming HR-3196, lobbied regarding "implementation of section 629 of the Communications Act, as amended, regarding set-top boxes, plug and play devices, and AllVid," according to its report on $3.98 million in overall expenses. NCTA also hired multiple firms to lobby on integration ban issues -- ML Strategies, according to its $60,000 Q3 report; Fierce Isakowitz, according to its $90,000 report; and Card & Associates, according to its $15,000 report. The American Cable Association spent $130,000 in Q3 and also named this specific bill, as did Cox Enterprises, which owns Cox Communications, in its report of $800,000 Q3 lobbying expenses. Cox also deployed Dow Lohnes Government Strategies to lobby on this bill, according to the lobbying firm's $40,000 Q3 report. USTelecom, among its $1.26 million in expenses, also lobbied regarding HR-3196. So did CEA in its $750,000 Q3 report as well as TwinLogic Strategies on behalf of CEA, according to that firm's Q3 report tallying $60,000 in expenses. TiVo's Zinn criticized members who only embrace "NCTA talking points" -- "incumbent favorers" who don't think through the issues and are "going to vote for cable." Zinn criticized the cable industry and called CableCARDs more burdensome for TiVo than cable. "Let's move to a new IP standard, but the industry has got to produce one," Zinn said, saying there's zero incentive to do so if the bill passes and the integration ban ends. "That [ban] is the market impetus for making change. Produce a new standard, get rid of CableCARD. That's the trade." He feared what would happen if the bill passed: "The world's not going to end the next day, but it will unravel a situation that at least allows for some competition today and [will] take away the incentive for there to be a successor standard that'll provide new competition." But eliminating the integration ban would provide "a real material benefit" to the cable industry, said a cable attorney. Latta's office met with TiVo before and after bill introduction, Walker said. "But we just have a difference of opinion." He described stakeholder engagement from both sides from the very beginning. Eshoo has disagreed with the legislation previously, but Latta's office can't speak to where she stands now, he said. The Senate proved a stumbling block for the bill's industry backers, Bayliss argued. Sen. Ed Markey, D-Mass., like Eshoo, was one of the backers of Section 629 of the Telecom Act when he was a House member. Markey "has made it clear to us that he's not going to support weakening Section 629 in any way and has communicated that" to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., Bayliss said. Markey opposes weakening Section 629, but "in any way" is too much of a flourish, an aide to the senator told us. A Markey staffer communicated this position to Rockefeller staff, the aide said. The bill's backers have shopped a bill around the Senate since mid-summer and "can't get a single person to introduce it," Bayliss said. Rockefeller's office did not comment. NCTA's spokesman confirmed it has lobbied for the proposal on both the House and Senate side. The bill has no shot in the Senate, said a consumer electronics attorney. The Latta bill "has a good foundation right now, and I think there's momentum towards being fully considered by the committee as part of a STELA reauthorization," said a cable lobbyist. He said conclusions about the bill's eventual support on the Senate side can't be drawn yet, because the House has generally been more active on video issues. Public Knowledge has reached out to Latta and co-sponsor Green and been told the bill is in the early stages but could progress after Thanksgiving. "I don't know what Chairman Walden has in mind for Congressman Latta's bill, but perhaps a hearing would be useful in shedding light on why the integration ban is too costly, too burdensome, too anti-consumer," Free State Foundation President Randolph May said, citing his call for elimination of the integration ban seven years ago. The FCC has authority to kill the ban, but if not, Congress could pass the Latta bill as a "common-sense, deregulatory measure," he said. At the FCC While the Latta bill is focused on removing one part of FCC CableCARD rules, there's a parallel issue at the commission over encoding rules and technical standards related to the devices. Those rules were struck down as part of the U.S. Court of Appeals for the D.C. Circuit's ruling in EchoStar that such rules didn't apply to the DBS industry (CD Nov 19 p6) OR (CED Nov 19 p5) OR (WID Nov 20 p10). The FCC asked for comment on a TiVo petition to resurrect those rules for the cable industry, but NCTA, Verizon, Disney, 21st Century Fox and others filed comments in opposition (CD Sept 19 p5). Although Zinn met with Chairman Tom Wheeler's staff last week, he said the FCC's position on bringing back the encoding rules isn't clear. "It's a black box," Zinn said of the FCC. Ongoing changes in bureau staff under the new administration also make the commission's standing on the matter unclear, said Bergmayer. The FCC likely won't act to bring back the encoding rules because there haven't been any problems caused by their removal, said Glist. "Normally if there's not a problem, no further action is required." For the new administration taking over at the FCC, there are likely other issues higher in the priority list, said a cable attorney. "I don't think this is a first-hundred-days kind of issue." However, the FCC has recently taken up several issues that have been pending for years, Bergmayer said. The commission has shown "a desire to take up some of the issues that have been going for a long time and move them forward," Bergmayer said. "I have a feeling that this chairman takes a more proactive stance" toward implementing the commission's rules guaranteeing competition for navigation devices, he said. The consumer electronics industry is encouraged by Wheeler's stated focus on competition, said a CE lawyer. CEA has said that without encoding rules, content providers might be able to turn off box owners' access to content, and Zinn said their absence could lead to more CableCARD waivers. -- John Hendel (jhendel@warren-news.com), Monty Tayloe >> |
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Msg # | Subject | Author | Recs | Date Posted |
121279 | Re: Read it and weep dreamers!! | HiDefGator | 0 | 7/28/2014 12:26:22 PM |