Comcast says additional AllVid gear would add $1.6B a year in consumer energy costs

Comcast (NASDAQ: CMCSA) said that the actual deployment of the FCC's "AllVid" proposal would cost consumers $1.6 billion each year in additional energy expenses.

Intended to enable set-tops sold at retail to be used in the pay-TV ecosystem, the AllVid plan would require cable operators to deploy additional hardware in their networks, or in customer homes, to "decode" cable signals for authenticated third-party devices.

"Under AllVid, consumers would have to rely on additional servers and on-premises devices to receive their MVPD service on retail devices," Comcast said in comments to the FCC. "Rather than simplify home networks as the apps-based approach does, AllVid could actually complicate such networks and require more equipment for customers, increasing energy consumption."

Comcast's comments -- which followed a similar missive by the National Cable Telecommunications Association last week -- relate to technology proposals rendered last month by the FCC's Downloadable Security Advisory Committee (DSTAC). 

Late last year, Congress mandated that the FCC form this committee to explore the replacement of CableCard, a dated, 1990s-era technology standard for including set-tops sold at retail in the pay-TV ecosystem.

Tech companies including Google and Amazon (NASDAQ: AMZN), as well as several lawmakers, are pushing DSTAC to come up with a solution that more seamlessly allows retail devices to work in the pay-TV environment. In September, DSTAC proposed two different technologies, including AllVid, to achieve this goal. 

While cable companies and their associated lobbying groups have taken aim at AllVid -- as well as DSTAC's broader objectives -- technology companies like Google (NASDAQ: GOOG) are hoping this committee can come up with a scheme that can achieve the primary goal that was never achieved by CableCard.

"To date, no retail device has been able to provide an integrated viewing experience across MVPDs' service offerings (i.e., linear content, video on demand, pay per view, etc.) that is comparable to what MVPDs provide with their leased navigation devices," Google said in comments to the FCC. "Nearly all MVPD subscribers therefore pay monthly fees to lease technologically stunted set-top boxes."

For their part, the cable industry has voiced support for DSTAC's other proposal, an "app-based" approach centered on HTML5 technology. Cable operators and their various lobbying orgs say it's essentially what they're doing now with TV Everywhere, with operators enabling a range of third-party devices through deployment of apps. 

"This approach allows MVPDs to develop technologies that support the use of retail devices in a manner that reflects both their own technical capabilities and consumer demand," said the American Cable Association in its comments.

"MVPDs like Comcast, as well as OVDs, rely on apps to support the delivery of their services to connected devices and to provide the flexible viewing options that consumers demand," Comcast said. "This apps revolution is already well underway today -- with even more to come in the future -- and is being driven by market forces, in the absence of any government mandates."

Added Arris: "As detailed in the DSTAC Report, the apps-based approach is built on a track record of marketplace success in enabling consumer access to a widening array of connected devices. In contrast, an AllVid-type approach would be unduly burdensome on MVPDs and their customers and should be avoided."

On the opposing side are technology companies like TiVo, Amazon and Google, which say apps provided by cable companies aren't delivering a rich enough experience to customers. 

"Using 'apps' to watch content on tablets, smartphones and other devices does not give consumers options for viewing video content using competitive user interfaces that present MVPD content in more innovative, interesting, and user-friendly ways than the cable operator dictates in its app," TiVo said. 

"The user experience is what differentiates consumer electronics products and is the reason that a consumer would purchase a retail device that provides a better experience than the consumer can get with an operator-supplied box," the TiVo comments added. "Retail competition involves more than simply viewing video programming on different screens; it involves innovative user interfaces, search functions, and so on that give consumers greater choice and an enhanced user experience -- a true alternative to what is provided by the operator."

TiVo is among a group of technology companies favoring DSTAC's AllVid-based proposal. Google is also a staunch supporter of the AllVid solution, noting that its own pay-TV service lets users toggle between video interfaces in a similar way. "Google Fiber devices and interfaces allow subscribers easily to switch between Google Fiber's linear programming channels and online video options like VUDU, YouTube, and a Netflix account. The Commission should commence a rulemaking to ensure that all consumers enjoy these sorts of options," Google said in comments. 

It's unclear where the issue will go from here. As NCTA officials have pointed out, Congress mandated that the FCC form DSTAC but it did not give the committee the ability to issue rules or regulations.

For more:
- read TiVo's FCC comments
- read Google's FCC comments
- read Amazon's FCC comments
- read Comptel's FCC comments
- read the ACA's FCC comments
- read Comcast's FCC comments

Related articles:
NCTA: There is no need for FCC's DSTAC to produce a CableCard successor for set-tops
DSTAC, CableCard, pay-TV apps challenge cable's stronghold on the set-top market
NCTA: FCC's Downloadable Security Committee 'veers off course' with AllVid support

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