WASHINGTON, DC — Sony Electronics and the National Cable and Telecommunications Association said Tuesday they have come to an accord that will allow consumers to dispense with set-top boxes while continuing to receive premium cable and satellite services.The NCTA represents the six largest cable companies in the U.S.: Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision Systems and Bright House Networks. Together they control 82 percent of cable subscribers. Sony is one of the dominant consumer-electronics manufacturers in the world. The agreement is significant because the two groups have been feuding for years about the best way to deliver “two-way” services like video-on-demand, pay-per-view and on-screen guides to viewers who may own very different types of equipment.
At the heart of the agreement is a concession from Sony: It will begin to incorporate the cable industry’s digital receiver technology into its television sets at some future date, although no target date was specified. The move means Sony and other manufacturers will lose a significant revenue center in the set-top box market. The cable companies will lose that revenue center, as well, because typically they rent equipment to subscribers who want to receive more than basic cable services.
Part of the problem in the past was that each cable provider’s equipment functioned slightly differently than every other provider’s, so users could not buy one piece of equipment and take it with them if they changed services. More than 10 years ago, however, Congress mandated that cable companies allow outside entities (like TiVo) to compete in the set-top-box market. The cable industry responded by developing “cable cards” that carry their unique code, allowing almost any set-top box to descramble their signals.
The cards have been problematic, though. They’re not bi-directional (meaning boxes can receive cable-company signals, but cable companies can’t receive signals from the boxes), which means they preclude two-way features. In-TV systems like Sony has agreed to install will solve those problems, NCTA said.
The organization also said it hopes other electronics manufacturers will follow Sony’s lead — before the Federal Communications Commission decides to step in.
“Every member of the FCC has encouraged the parties to resolve these highly technical issues in private-sector negotiations,” Kyle McSlarrow, president of the NCTA, told the Washington Post.
