When fully implemented and if approved by the Federal Communications Commission, the deal could set a “plug-and-play” standard that will make every new digital TV compatible with major cable systems nationwide. Proponents hope it will ease the transition from analog to digital TV and help the cable industry fight satellite’s encroachment in market share and retail space.
“For the first time, the cable industry will enjoy a substantial retail presence,” said Robert Sachs, president/CEO of the National Cable & Telecommunications Association. This will mean that the cable industry will soon have something to sell to customers who are swayed by satellite commercials or in-store displays: The ability to connect to digital TVs without more equipment. About 2 million digital televisions have been sold nationwide.
“Consumers will not need a set-top box in order to receive our services. This is very consumer-friendly and we expect it will be very well received in the marketplace,” Sachs said.
Mark Coblitz, SVP of strategic planning at Comcast Corp., said it’s crucial that cable has parity with competitors in consumer electronics.
“There are literally billions of dollars that are spent on developing of consumer electronics equipment, and none of those dollars have been focused on products that would interoperate with the cable TV industry … This is a place where we just have to be,” Coblitz said.
While this agreement will make digital TVs compatible with 90% of cable systems, it’s not without potentially controversial aspects. One involves encoding that could thwart or limit personal video recorders, although sources said current capabilities would not be affected and recording within the home environment would continue to be done.
As for some of the more gee-whiz interactive TV, the long-awaited next step, Coblitz said Thursday’s agreement is an important first step.
“Advanced interactive devices, they’re more sophisticated and they’ll take a lot of work. We’re going to get to work on that right away,” he said.
Executives from the Cabletelevision Advertising Bureau declined comment until they had a further look at the agreement.