FCC Seeks Comment on Cable-Consumer Electronics Digital Television Agreement

On Jan. 10, 2003, the Federal Communications Commission opened a further rulemaking process necessary to consider and adopt regulations arising from the December 2002 agreement between major cable operators and major consumer electronics companies.

As has been widely reported, the landmark agreement sets the stage for a national “plug-and-play” standard between digital television products and digital cable systems, under which consumers will be able to buy digital TVs (DTVs) that connect to digital cable systems without a set-top box, and enjoy easy access to high-definition television (HDTV) services offered by cable operators.

The terms of the agreement are embodied in a Memorandum of Understanding (MOU) reached by 14 consumer electronics companies, representing the majority of HDTV sales in the United States, and seven major cable operators, representing more than 75 percent of all cable subscribers. The Agreement consists of a package including: (1) voluntary commitments by the signatories; and (2) proposals for rules to be adopted by the FCC that, once adopted, would resolve other issues.

The joint recommendations include: a set of technical standards for cable systems and “cable-ready” DTV products (with testing procedures to assure compatibility); a proposed regulatory framework for support of digital TV receivers, digital recorders with secure interfaces, and other devices on cable systems; a draft security technology license to ensure that high-value content can be transferred securely in the home network by consumers; and encoding rules to resolve pending copyright-based concerns about home recording and viewing.

The agreement reflects a proposed resolution of many contentious matters that had been the subject of acrimonious dispute before the FCC and Congress. The resolution required balancing the interests of program suppliers in having the tools to control against unauthorized dissemination of digital programming; the needs of cable operators to maintain security sufficient to attract high-value programming to digital systems, while maintaining parity of technological tools with competing video distribution media; the interests of manufacturers in having predictable specifications for the design of consumer electronics; and the interests of consumers in maintaining certain home copying rights.

The FCC is seeking comment on the MOU and the proposed Commission rules. It also seeks comment on the potential impact of the MOU and its proposed rules upon consumers, content providers, small cable operators, and MVPDs other than cable operators. It seeks specific comment on the Commission’s authority to adopt the encoding rules and to address the down-resolution of programming, one solution to what is sometimes known as the “analog hole.” (A concern frequently expressed by program providers is that the value of technological tools designed to secure digital programming from unauthorized copying is undermined if devices also output analog signals over high definition analog ports that enable high-definition copies that may later be digitized. One solution, to reduce the resolution of such programming, is now subject to discussion in this FCC process.)

This memorandum summarizes the entire agreement reflected in the MOU, which provides the context for the issues put out for comment by the Commission.

Effect on TV Products

• The agreement allows set-top box functionality to be built into “one way” digital TV sets and other products (such as digital video recorders) so they may receive scrambled premium programming without a set-top box. 
  
  
• A separate security card (known as a “Point-of-Deployment” or “POD” module, which is similar to a smart card) supplied by the cable operator plugs into the DTV (or other device) to enable direct receipt of scrambled services. 
  
  
• A set-top box is still needed to access advanced interactive digital cable services such as video-on-demand or a cable operator’s enhanced program guide. (The parties are continuing discussions concerning DTV sets and other devices that can receive cable’s advanced, two-way services without a set-top box.) 
  
  
• The agreement addresses the need for DTV sets and set-top boxes to have secure digital connectors to permit copy-protected display and recording of high value digital content. These digital connectors will also allow consumers to receive high-definition television without a set-top box and will “future-proof” the DTV set so that advanced interactive services of a cable system can be delivered to the one-way DTV set through connection to a set-top box. 
  
  
• In particular, CE manufacturers will add the secure digital DVI/HDCP digital connector to POD-equipped HDTV sets on an agreed-upon schedule. POD-enabled 720p/1080i (HD) grade televisions will include DVI/HDCP ports on the same schedule as the FCC’s new DTV broadcast tuner rule. 480p grade televisions may use Y,Pb,Pr interfaces in lieu of DVI. Effective Dec. 31, 2003, upon consumer request, MSOs will provide their customers with a high-definition set-top box with both a DVI connector and a secure 1394/5C digital connector, to support DTV sets and home recorders which have only the 1394 digital connector. Effective July 1, 2005, MSOs must include both a DVI (or HDMI) interface and a 1394 interface on all high-definition set-top boxes acquired by a cable operator for distribution to customers.

Home recording issues

• Devices built to the proposed standards must recognize and respect the copy-control signals needed to protect high-value digital content (for example, video-on-demand movies) as such content passes through the digital connectors. 
  
  
• The proposed “encoding rules” (consumer home recording rights) would apply to all Multichannel Video Programming Distributors (such as cable and DBS). The rules are modeled on standards previously adopted by Congress (DMCA §1201(k)) and used in private licensing agreements between studios and consumer electronics companies (the “5C” license for the DTCP protection applied to secure 1394 ports.). These rules provide that:
  
  
  • Subscribers may make at least one copy for their private and personal use of any digital program sold by monthly subscription. 
    
    
  • Programs sold individually (pay-per-view, video-on-demand and subscription video-on-demand) may be marked as “copy never,” but cable subscribers may pause or store them (on PVRs) for 90 minutes (or longer, if agreed to by the program provider). 
    
    
  • A prohibition on “selectable output controls” will be effective when the FCC makes the restriction applicable to all MVPDs. 
    
    
  • Free over-the-air broadcast signals may be copied freely, and may not be reduced in resolution (“down-res’d”) when output from unprotected high definition analog ports. 
    
    
  • The proposed rules are neutral on down-resing of all other content, leaving it to the FCC to decide how to address the “analog hole” through which high-quality high-value programming passes in unprotected format. 
    
    
  • These encoding rules will not apply to cable operator (or affiliate) use of cable modem or the Internet for content distribution. The Internet and other technologies are left to Congress.

Support for Products

• Digital cable systems with an activated channel capacity of 750 MHz or greater shall meet agreed-upon technical standards in order to assure delivery of digital services to these POD-enabled devices. No later than July 1, 2004, cable systems with an activated channel capacity of 750 MHz or greater shall meet agreed-upon standards (subsets of existing SCTE 40, 65, 54, with some adjustments, plus a prior (February 2000) agreement covering carriage of certain PSIP information along with digital broadcast signals) designed for providing service to one-way televisions. These standards are embodied in the proposed FCC rules. All digital cable systems will comply with other complementary technical standards (SCTE 28 and 41), including support of retail devices intended for use with operator-supplied PODs.

DFAST License

• The encryption technology used at the POD-Host interface is known as DFAST. The patent license for DFAST will be provided for use in “basic” (one-way) products with fewer conditions than are required from the current “PHILA” Agreement under which DFAST is currently licensed. The new DFAST license does not include detailed receiver or other specifications, relying instead on general warranties that the devices will not technically disrupt, impede or impair delivery of services to cable subscribers, promote theft or cause harm to network or to the POD, and on the adoption of the remainder of the package of agreements and rules.

Testing and Certification

• These products will be tested to assure that TVs can tune and display scrambled digital services. The tests will also assure that all POD-enabled products will not technically disrupt, impede or impair delivery of services to cable subscribers, promote theft or cause harm to the cable network or to the POD. The testing and certification process has been streamlined, utilizing a consensus testing process and CableLabs’ participation, while providing a path towards self-certification by manufacturers. 
  
  
• The POD may be revoked for products that do not adhere to the compliance and robustness rules as specified in the patent license governing the POD interface.

Consumer Information

• Voluntary labels will describe and distinguish between one-way products and those products that also have a secure DVI or 1394 connector. TVs may not be marketed as digital cable ready (or words that have the same effect) unless they include the DVI ports indicated above, tune channels in a manner consistent with the output of the cable system, and respond to EAS signals. Post-sales material will inform the customer of equipment capability.

Comments are due March 28, 2003, with replies due April 28, 2003.