Before, I discussed some of the ways in which CableCARD, already hampered by the reluctance by some in the cable industry to fully adopt it, is obsolete before its time. Successors to CableCARD are in the works. The current champion appears to be DCAS, a software-based solution. (“CableCARD 2.0” mostly refers to an enhancement to CableCARD. What we're talking about here is its full-blown successor.)

Public Knowledge does not have a position as to what particular technologies ought to be used in a successor to CableCARD. We're not engineers. Our concern is to protect consumers and innovators. Unfortunately, the current proposal by CableLabs mandates that a particular technology called OCAP be used in all DCAS devices. This kind of technology mandate we have a problem with, because by forcing third parties to all use the same software implementation of a standard, the cable industry would greatly reduce the amount of innovation possible in the hardware space. Consumers would be worse off by a lack of competition, keeping prices high, and a lack of innovation, keeping pickings slim.

The CEA proposal goes a long way toward addressing some of the shortcomings in the CableLabs proposal. Accordingly, we support it. However, neither the CEA nor CableLabs seem to be giving much thought to the issue of fair use. Consumers have a right to make fair use of the content they legally obtain. Any successor to CableCard, DCAS or otherwise, needs to not put technological and legal barriers in the way.

Problems with the CableLabs Proposal

Given their reluctance to comply with the CableCARD program, it is predictable that the proposal developed by the cable industry for a successor to CableCARD would make it very difficult for third parties to develop competing hardware solutions. This directly impacts customers both in terms of price and the number and quality of services available to consumers. The proposal by CableLabs, a cable industry-controlled standards-setting group, would require that all third-party devices that want access to SDV (as well as pay-per-view and similar services) would have to use something called the OpenCable Application Platform (“OCAP”). OCAP is essentially an operating system for consumer devices that want to access two-way functionality on cable networks (CableCARD's limited functionality will still be supported for some time).

You don't have to buy a phone from a particular vendor to make a call or use particular software to access or host a website. The software or device just needs to speak the right language. That's why it makes no sense to require a particular operating system for this kind of functionality. A standard that is simply “baked in” to a particular implementation is not a standard at all. Two-way communication for basic kinds of video services (such as SDV and pay-per-view) ought to be governed by a standard controlled by an independent body. Different entities could then create different implementations of the standard, just as today you can have different web browsers and email clients. Different pieces of software can talk on the same network as long as they play by the rules; this is what standards are all about. Requiring OCAP to watch an SDV channel is similar to requiring Internet Explorer to view a website.

Given the way that OCAP is currently being described, all OCAP devices on a network will have a uniform user interface and set of applications. OCAP is not an operating system like Windows or Mac OS X where the user can install her own applications and customize the environment at will. It is more like the operating system on a BlackBerry, where the network operator controls what applications may run and what they may do (we think that's a problem too). While consumers probably don't need to have the same level of direct control over their video devices that they have over their PCs, there should be some amount of choice in the marketplace. If the cable industry gets its way, it will be very difficult for third parties to differentiate their products by offering innovative services and software. Some may not even bother entering the market, and competition would be stifled. Consumer choice will be limited.

Policy-wise, it also makes no sense for the cable industry to be designing and marketing the software that their competitors in the hardware space will have to use. They would like to set the rules that their competitors have to play by, and it is inevitable that they will have superior knowledge of the technology that they, after all, came up with. For entirely institutional reasons, the cable industry may create rules and systems that stifle competition and harm consumers.

If the FCC ratifies the CableLabs plan, the third-party hardware manufacturers would have no choice but to license OCAP. The license terms and NDA associated with it are very strict. Third parties would have no choice but to either accept the onerous OCAP terms or forgo entering the market. They would have almost no negotiating power.

The FCC should not support a plan that is so plainly against the consumer interest. A plan to increase and assist competition in a marketplace should not be designed and implemented by one of the competitors.

The Consumer Electronics Association Proposal

Something like OCAP might be required for some kinds of services. Interactive games are an obvious example. Cable companies are rightly interested in being able to offer this kind of service to all of their customers, and not just those that have purchased first-party hardware. A proposal by the Consumer Electronics Association makes the use of OCAP in the successor to CableCARD optional. Third parties who wish to allow their customers to access services that require OCAP would be able to do so. Since OCAP would not be mandatory, the third parties would have some negotiating leverage and it is likely that the OCAP license terms would become less oppressive. The CEA also proposes that standards for basic video communication services, such as SDV, pay-per-view, and video-on-demand be set by an independent body and not by an organization like CableLabs that is completely controlled by the cable industry. The CEA proposal has many interesting and consumer friendly ideas, and is definitely closer to what we're looking for than the proposal by CableLabs.

The Need for Fair Use

But neither the CableLabs nor the CEA proposals address the important issue of fair use. Consumers need to be able to make fair use of the content that they have legally obtained. Barriers should not be placed in the way of recording and time-shifting. DRM should not prevent a consumer from moving content from one device to another, or from sharing content within a “personal network.” There need to be inputs and outputs on devices so that consumers can move content from one device to another, and copy protection schemes should not get in the way of this. The content industry's understandable desire to prevent piracy should not prevent consumers from making legal use of what they have paid for.

Conclusion

The FCC should pay close attention to the CEA proposal, which does a much better job than the CableLabs proposal at ensuring that there will be meaningful competition among hardware providers, and consequently lower prices and a wider variety of services available to consumers. But the FCC should also act to ensure that any successor to CableCARD makes it possible for consumers to exercise their rights to make fair use of the content they have purchased.

The gory details of how cable television works can make anyone's eyes cross. But as long as the cable industry uses new technical innovations as a method to prevent competition and restrict consumers, and as long as fair use rights are ignored, consumers ought to be concerned.