Battle erupting over possibility of mandated plug-and-play HDTVs in Canada

Bell ExpressVu LP says forcing manufacturers to construct plug-and-play high-definition (HD) televisions in Canada will give cable operators an unfair advantage as subscribers begin acquiring the hardware necessary to receive HD programming. Terry Snazel, VP of technology at Bell ExpressVu, says that if Industry Canada forces manufacturers to include the necessary hardware in televisions, it would increase the cost of HD-ready televisions by $500 to $1,000. But, unlike cablecos, DTH satellite TV companies will still have to sell their customers an additional set-top box even after consumers have swallowed the cost of a high-tech set. He adds that Bell ExpressVu is actively lobbying Industry Canada to reject the U.S. lead and refrain from regulating it. With plug and play, television sets that are HD compatible also contain hardware that enables cable consumers to receive digital services, including high-definition signals, without the need for a separate set-top box. Plug and play was mandated by the Federal Communications Commission (FCC) last September in an effort to boost the transition to digital television by making things more convenient and simpler for consumers (CCR Update, Sept. 24/03). "There are industry people asking for plug and play. So far, people have said it would help the over-the-air TV stations to launch (in HD), and when I hear that I get kind of upset. It’s something that we don’t think is a good idea," says Snazel, adding that plug and play disadvantages satellite TV distributors. "The reality is that if TVs don’t have the cable-ready box, they are cheaper. I feel comfortable saying that. And the best way to get more and more HD televisions in the marketplace is to offer them at the lowest possible price," he says. "I say make plug-and-play TVs available, but they shouldn’t be mandated." Michael Lee, VP of product management and development at Rogers Cable Inc., indicated during a session at the Canadian Satellite Users Association conference on February 2 that 80% of TVs could be made HD cable-ready with no bump in price, and that the inclusion of a cable-ready card in the sets would add value for customers. He noted that Rogers is experimenting with the technology in conjunction with U.S.-based Cable Television Laboratories Inc. (CableLabs). "We expect that something like that (plug and play) would be really valuable for us in the long haul," he noted. Snazel disagrees, telling Canadian Communications Reports that, during a seminar in New York, manufacturers identified the individual components needed to make a television set cable ready and pegged the cost at US$500. "They were credible, breaking the cost down by each chip," he says. "High-definition chips are not cheap." Michael McEwen, president of Canadian Digital Television (CDTV), calls Snazel’s figures "a bit exaggerated." "(The manufacturing industry) said it was going to cost $400 to $500 to build in over-the-air tuners, and that’s probably true if your market universe is only 500,000 cable TV sets. But when you start talking tens of billions of sets that figure becomes somewhat more marginal as in the $40 to $50 range that the FCC is adding to each TV set," says McEwen. "We have to understand whether that price being paid is worth the cost of boosting the digital transition." Peter Miller, VP of planning and regulatory affairs of radio and television at CHUM Ltd., differentiates between built-in over-the-air tuners and plug and play and tells CCR that the fall-out of not mandating built-in tuners could be an influx of sub-standard TV sets as manufacturers use Canada as a dumping ground. Miller notes that consumers must have cable or satellite TV to receive the HD digital versions of broadcasters’ over-the-air channels, or they have to buy a separate expensive HD tuner. "If you buy an HD television set and you use rabbit ears, it doesn’t work. I think that all televisions should have over-the-air built-in HD tuners," he tells CCR. "We want to give broadcasters incentives to go over-the-air and to do that consumers have to have TV sets that receive the signals. Otherwise, it is absurd. I mean cable can look after itself and satellite TV can look after itself, but if you don’t have the tuner in the box, why the hell are we going over-the-air?" Miller adds that the built-in tuner debate in the United States has merged the over-the-air tuner and cable plug and play. "What we need is the over-the-air tuners. If we don’t make it a policy in Canada that they should be sold (in TVs), what will happen is that manufacturers will start shipping their old inventory to Canada," he tells CCR. "Given that we’re a tenth of the market, we could be having this old inventory shipped to us for years." Without any government regulation, Miller also fears that TVs sold in the Canadian market might also exclude broadcast flags, which protect against pirating of digital signals. As a result, he says that U.S. program suppliers could refuse to sell HD programming to Canadian broadcasters because TV hardware sold north of the border would offer little protection. "I really think that Industry Canada should take the same policy position as the FCC and say that over-the-air tuners should be built in for sets sold in Canada from 2007 onwards," Miller states. Markham ON-based ATI Technologies has already announced the introduction of the Xilleon 210VC, which it dubs as the world’s first digital terrestrial and cable plug-and-play television-on-a-chip. In a January 5 media release, the company said the Xilleon 210VC supports the terrestrial broadcast standard mandated by the FCC as well as the cable plug-and-play (digital ready) standard approved by the U.S. industry and regulator, and supports the highest quality HD video decode. Industry Canada ADM Michael Binder says it is likely that the department would begin a process to look at the possibility of mandating plug-and-play HD sets in Canada. "Every time the Americans come up with a mandated hardware, we have a look at it because nobody manufacturers boxes for the Canadian market alone," he tells CCR. "If manufacturers are going to manufacture it for the U.S. market, chances are it is the same box that will be used in Canada. So we want to know the implication for us. Do we need to mandate it? …By the way, we look not only at the U.S. market but also the European market. Let’s see what they do and what applies to us. It’s still early days."

Battle erupting over possibility of mandated plug-and-play HDTVs in Canada

Broadcast | February 13, 2004

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