Qualms Over QAM (2012 CEA re-post)

(Since a site redesign at the Consumer Electronics Association resulted in the posts I wrote for CEA’s Digital Dialogue blog vanishing, along with everything there older than last November, I’m reposting a few that I think still hold up or shed light on current issues. This one ran on Feb. 14, 2012;  the AllVid effort I mentioned at the end has gone nowhere since, but in October, the Federal Communications Commission voted to allow QAM encryption–with results that I’ll be discussing in this weekend’s USA Today column.)

This month’s telecom-policy squabble covers a TV technology that nobody seems to love–if they even know it exists.

The system in question goes by the name QAM, short for “quadrature amplitude modulation,” and it’s the only way to tune into digital cable without a box. But while “cable-ready” sets dealt fairly well with even premium channels in the mid 1990s, QAM’s horizons are far more limited.

Coax cableYou can’t count on QAM providing more than the “basic tier” of local broadcast stations plus public, educational and government channels. Forget ESPN or even CNN; to get those without a cable box, you need a CableCard-compliant device–which in practice means either a TiVo digital video recorder or one of a few add-on tuners for computers.

But it’s worse than that: As readers have testified and I’ve seen myself, QAM reception often presents a puzzling picture of your cable choices. Channels can appear under seemingly random numbers–and then move to new ones or disappear outright.

So the proposal now before the Federal Communications Commission to allow cable operators to encrypt QAM signals on all-digital networks–simplifying their systems while cutting off existing QAM hardware–might not seem like anything worth fussing over.

And yet for a small minority of users, QAM does work. Some use it on second or third sets (PDF); some resorted to basic-tier cable after failing to get adequate over-the-air digital-TV reception; some employ it to use computers as digital video recorders. And these subscribers don’t want it to go away.

How many people are we talking about? The Web-media-receiver vendor Boxee says that 40 percent of buyers of its new Boxee Live TV device use QAM to receive cable TV through that add-on. You could dismiss that as a figment of a small sample size; that $49 add-on has only been on sale since January. But a more established computer-video vendor, Hauppauge Computer Works, also cited 40 percent QAM usage (PDF) among buyers of its PC peripherals.

The Consumer Electronics Association has no stats for this segment of the market.

CEA has joined those manufacturers in their opposition to QAM encryption, writing in a November filing (PDF) that the FCC should decline this request unless it also moves forward on other, long-standing proposals to open up the market for TV hardware (more on that in a moment).

The cable companies’ arguments, as related over a call Friday with representatives of the National Cable & Telecommunications Association, fall into three categories:

• Cable operators’ own figures suggest that almost nobody relies on QAM. Cablevision, which obtained a waiver from the FCC to start encrypting QAM after converting to all-digital service in New York, N.Y., reported that “less than 0.1 percent of subscribers” (PDF) requested a free set-top box or CableCard to decode it.

• Encryption will allow remote activation and deactivation, without sending a technician on a truck to somebody’s house. (NCTA realizes that people don’t like sitting through four-hour service windows.)

• Encryption will also stop people from tuning into basic-tier cable without paying. RCN, among other cable operators, reports (PDF) this is a growing problem among Internet-only subscribers.

It’s important to note that the the cable operators, while maybe not everyone’s favorite companies, have been way ahead of satellite vendors in the interoperability game. DirecTV users who wanted to plug in a TiVo could only wait for that service to ship its own “DirecTiVo” model; that recently arrived, years late, to complaints over its aged interface.

Meanwhile, CableCard finally seems to work as advertised–even if that’s happened too late for some pioneering CableCard vendors. Once-prominent TiVo rival Moxi Digital gave up the fight two weeks ago when its new owner, ARRIS Group, announced that it would only sell through cable operators.

There’s been a proposal afoot, against opposition from cable, to set a comprehensive pay-TV standard called “AllVid” that would work not just for cable but also satellite and fiber-optic services. It would allow every screen in a home network to tie into a simple gateway adapter–the video equivalent of the wireless router that links a cable modem and a laptop.

That’s what CEA has been asking for in return for giving up clear QAM. Boxee could also live with this tradeoff, said spokesman Andrew Kippen; Hauppauge CEO Ken Plotkin, however, was not to ready to make that deal.

Me, I think I could live with that bargain–if it included an assurance that current QAM users who will have to tolerate a new box and remote control won’t have to pay extra for them. (If encrypting QAM harms so few people and yields as many benefits as cable operators say, they should be able to afford subsidizing that hardware.)

But this is an easy thing for me to say, since I switched to over-the-air and Internet broadcasts years ago. If you pay for cable today, I’d rather know your opinion: Would you trade simple reception of entry-level cable today for easy access to a full lineup of channels a few years from now?

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A cord cutter visits the Cable Show

I spent the first half of this week at a place I wasn’t sure I’d be welcome–the Cable Show, the annual convention put on by the National Cable & Telecommunications Association. After my wife and I canceled our Dish Network TV service back in October of 2009 and realized we could live without pay TV, I’ve repeatedly suggested that other TV subscribers weigh that option.

ImageFortunately, no bouncer tossed me out of the convention center in Boston (disclosure: one reason I attended was the chance to stay with my brother and catch up with his family), and I learned a few things about the market I’ve been avoiding since 2009.

(Yes, even though one of my clients is cable giant Discovery Communications. The irony is duly noted.)

One was that there is an enormous amount of stuff to watch on TV if you’re willing to pay for it–as JetBlue reminded on my way to and from Boston. Another was that the cable industry has recognized that the cable box is not exactly everybody’s  favorite gadget and is working to streamline its interface and reduce its power consumption. (My wrap-up of that awaits an editor’s attention; my photos of the show are up.)

But I also got a reminder that in some fundamental ways, the cable industry thinks it’s doing fine–NCTA president Michael Powell said in his opening keynote that “this industry has never been content to rest on aging business models”–and doesn’t need a fundamental change of course.

I don’t recall hearing the words “à la carte” spoken at any point, nor did I run into any serious discussions about the lesser step of offering subscribers a wider choice of channel bundles. “AllVid”–a nebulous proposal by the Federal Communications Commission for a unified standard for subscription-TV reception that might open the market for tuning and reception hardware–only came up when I asked an FCC staffer about it after a panel on regulatory issues had failed to mention the topic.

And you can continue to forget about paying for real-time online access to shows without the conventional cable subscription required by such Web-viewing options as HBO Go. The industry sees that and other cable-subscription-first “TV Everywhere” offerings as customer-retention moves, not ways to draw in new viewers.

And as for cord-cutting–a topic that drew me to Boston a year ago, when I led a panel about the topic at Free Press’s media-reform conference–the cable industry doesn’t seem to think it’s a serious issue. Chief executives and lower-ranking staffers all repeated that it’s not losing any viewers it would want to keep. For example, during Tuesday’s opening session, Time Warner CEO Jeff Bewkes said a predicted wave of cord cutting “didn’t happen” except for “economically challenged customers… many of who didn’t even have boadband at home.”

I thought about standing up, waving my hand and shouting “dude, I’m right here!” But I did not.

I might have also said then that my brother and his wife cut the cord last summer (while retaining a Comcast Internet connection). After day one of the show, I went home to my brother’s house and watched a few episodes of NBC’s Community on his paid-for Hulu Plus subscription. After day two, we caught an episode of HBO’s Game Of Thrones that he obtained… somehow.