Regulation that Works
Here in Washington, DC and no doubt in the rest of the country as well, Comcast Cable offers a cable box that includes high-definition DVR capabilities. It works pretty well, but the service they provide is markedly inferior to that offered by the TiVo HD DVR. But of course for your TiVo device to work at all, it needs access to the cable channels provided by, well, the cable company. So why doesn’t Comcast rig things so that you have to use Comcast’s box in order to get HD channels? You wouldn’t need to pay them extra for DVR service if you didn’t want it, but if you did need DVR service you’d have to get Comcast’s service.
Instead of pursuing that seemingly lucrative strategy, instead Comcast offers a CableCARD that plugs into your TiVo box. Why do they do it? Well, the answer turns out to be Big Government. Section 629 of the Telecommunications Act of 1996 requires the FCC to “assure the commercial availability to consumers of multichannel video programming and other services offered over multichannel video programming systems, of converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.”
That led to the CableCARD and the CableCARD leads to the viability of TiVo. And of course it’s the viability of TiVo that gives cable companies the incentive to offer their own DVR services. Then, thanks to the magic of market competition, the rival firms compete on price and features and consumers have choice. But the magic of market competition only works in the first place thanks to savvy regulations.
53 Responses to “Regulation that Works”
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October 20th, 2008 at 1:32 pm
“Why do they do it? Well, the answer turns out to be Big Government. Section 629 of the Telecommunications Act of 1996 requires the FCC to “assure the commercial availability to consumers of multichannel video programming and other services offered over multichannel video programming systems, of converter boxes, interactive communications equipment, and other equipment used by consumers to access multichannel video programming and other services offered over multichannel video programming systems, from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.”
Viva Reed Hundt! Viva Al Gore!
October 20th, 2008 at 1:36 pm
Yeah, but just try actually *getting* a CableCard from Comcast. It took me a month out in Arlington, with bad instructions from call center employees, two missed service appointments because they didn’t have any CableCards at the warehouse, and an inability for anyone from Comcast to tell me when they might have CableCards back in stock. I finally called Arlington County’s Cable and Television Office, who worked with Comcast government relations to finally provide this service they’re legally required to support.
So, yes, yay for regulation, especially local governments that actually make the telecoms comply with this stuff.
October 20th, 2008 at 1:37 pm
Of course the humorous/depressing aspect of this is that, in reality, (some?) cable companies still make it unreasonably difficult to work around them. I have 2 TiVos hooked up via CableCARD, and it took 4 or 5 visits by Time Warner techs to get it working. I was told that they only offered cableCARDs “because they had to,” they weren’t really “supported” by TW, they strongly “recommended” that I stick with their boxes so that I would get the best service, etc. They even played the fear card — if the cableCARD somehow broke my TiVo (which I was assured was VERY common) then they would not be responsible.
There was also the technical aspect of getting the cards sync’d up and working with TW’s central service, which takes some magic beyond my comprehension. It essentially boiled down to trying a dozen or so different cards, balancing on one leg and whistling the secret word until it finally worked. We were already fully committed to TiVo going into it (have been subscribing for years, just upgraded for HD) but I can’t imagine that anyone newly considering TiVo would have made it through that process without throwing in the towel and submitting to the (laughably inferior) TW box. A classic example of the ways in which a sufficiently motivated company can still exert pressure to keep others off the playing field without technically violating any regulations.
October 20th, 2008 at 1:38 pm
If you were a true, hard-core libertarian, you’d argue that the only reason cable monopolies exist at all is because of government regulation.
Indeed, if private individuals were legally allowed to string coaxial cable all over the place willy-nilly, then average people would be able to make purchase decisions based on the features of the cable provider, and most would probably chose to buy cable from companies that allowed you to use any DVR.
A more reasonable solution would be for local governments to build their own communications networks just as they do the roads, (possibly underneath them) and allow each content provider to stream content directly to the consumer over the internet.
October 20th, 2008 at 1:41 pm
> If you were a true, hard-core libertarian, you’d argue that the only reason cable monopolies exist at all is because of government regulation.
This is true, but you don’t have to be a hard-core libertarian to acknowledge this.
October 20th, 2008 at 1:42 pm
The TCA is one of THE worst pieces of legislation in the Clinton years. It’s directly responsible for Clear Channel’s domination of the radio dial, among other atrocities facilitating the right wing’s seizure of the media. Its privatization of the airwaves was wingnut welfare at its worth – valuable state-owned commodities parceled out to well-connected private enterprise for pennies on the dollar. And that’s just scratching the surface of why this bill sucked.
I’m glad your frivolous luxury device works well, but let’s not burn the house down to save the remote control.
October 20th, 2008 at 1:43 pm
*at its worst (but if the cap fits…)
October 20th, 2008 at 1:44 pm
But the magic of market competition only works in the first place thanks to savvy regulations.
It’s only really necessary because Comcast has a monopoly on the cable lines to your house. If there were multiple cable companies to choose from, the regulation would be unnecessary, as they would have incentive to compete with each other.
October 20th, 2008 at 1:44 pm
Communist. Government regulators forcing companies to grant competitors access to their monopolistic infrastructure… sounds like something one of those Communists like Reagan or Teddy Roosevelt would do. Wait, did I say “Communist”? I meant “Republican.”
Incidentally, just read something on a conservative website about the possibility of addressing companies that are “too big to fail” by, er, making them smaller so they can fail. In the old days they used to call this “antitrust” or something.
October 20th, 2008 at 1:50 pm
“The TCA is one of THE worst pieces of legislation in the Clinton years. It’s directly responsible for Clear Channel’s domination of the radio dial,”
The TCA was a bill that did an enormous number of things, some good and some bad. The GOP Congress was able to insert certain of their priorities that I’m not in favor of. But any serious analysis of the bill as a whole would say it did far more good than bad.
October 20th, 2008 at 1:57 pm
ohhh this should be a series.
Here’s a great example for the next one. Regulation that works: why France has more high-speed internet than we do.
Reference:
http://select.nytimes.com/2007/07/23/opinion/23krugman.html?hp
October 20th, 2008 at 2:02 pm
The larger question is why you need a DVR “service” at all. A DVR is basically just a hard drive connected to your television, with software that allows you to save TV shows to the drive for later viewing. Why that should require you to pay a monthly fee is an absolute mystery to me.
A DVR is a product, not a service, comparable to a computer or mp3 player. Once purchased, they are completely functional without having to pay any fees whatsoever. One can choose to subscribe to particular content, but that’s an auxiliary function, not the main feature of the product.
I think that DVRs have the potential to revolutionize the way we watch TV, but the current business model of requiring owners to pay an endless amount of money for the privilege of owning a Tivo is a scam, and DVRs will only become more widely accepted once that paradigm has fallen by the wayside.
October 20th, 2008 at 2:08 pm
I’m not sure I’d call the CableCard as an example of regulation well done.
If they’d just agreed to a broadcast standard, the standard tuner would work. But they wanted to lock you into something proprietary so they could get the monthly rental fee.
October 20th, 2008 at 2:11 pm
Good question. I don’t have a monthly fee with my VCR.
Now with more and more television shows appearing for free via hulu, or on their respective networks websites. I don’t find that I have any use for a VCR or DVR these days.
October 20th, 2008 at 2:18 pm
“A DVR is a product, not a service”
Well, actually, no.
A DVR is semi-useless without the monthly service of receiving program listings.
From the Wikipedia page on TiVo:
—–
Personally, I rent my DVR from my cable company rather than buying a TiVo because buying a TiVo would cost me more than renting from my cable company, and the additional advantages offered by a TiVo are not worth the price difference to me.
October 20th, 2008 at 2:22 pm
Wow. Cox Communications in Phoenix is just as bad. They offer a dramatically inferior DVR and it took 3 service calls and half a dozen cable cards to get the channels working at all.
October 20th, 2008 at 2:37 pm
@Petey:
“A DVR is semi-useless without the monthly service of receiving program listings.”
The so-called service of allowing the owner to download tv listings is not worth the $20 a month that Tivo charges. With open source coding, your average programer could write a script to download your local tv listings for free. The schedule is widely available on all kinds of websites, not some proprietary information that justifies charging those kinds of rates.
My objection is that a person paying $20 a month plus the initial purchase price will wind up paying much more than he or she would have been willing to pay up front for the privilege of recording television programs. The idea of packaging Tivo as a service rather than a product is a way of artificially elevating the price and turning customers into lifelong revenue streams.
October 20th, 2008 at 2:38 pm
The service you’re paying for is the constantly updated programing guide. Are there ways to build your own home theater PC with DVR functionality? Yeah, but my understanding is that it’s a pain in the ass.
Also, I don’t know if they’re doing it anymore, but I had a roommate who ended up with something like four Tivos because there were rebates that basically made the device free as long as you signed up for the service.
October 20th, 2008 at 2:40 pm
In addition, the combination of the product and service model for TiVo includes having the best UI in the business, and having people working to add new features to the device. Now, you could go with a MythTV box on a small form-factor PC to do that stuff, but you end up with UI-designed-by-Linux-hackers and the wonders of tinkering around to get the various bits working.
(There are people still holding on to UK-compatible S1 TiVos, several years after they moved out of the market, because there’s still nothing to match the UI among the various Freeview DVRs.)
the current business model of requiring owners to pay an endless amount of money for the privilege of owning a Tivo is a scam
It’s not a requirement. If you want to pay $400 in one lump sum, you get the service for the lifetime of the box.
Now, the fundamental point here is that the local cable monopoly, and the cable-package sales model, are still problematic, and the latter could be regulated out of existence very quickly by à la carte pricing.
October 20th, 2008 at 2:40 pm
Petey said it well. I’ll just add: your Tivo will work perfectly fine as a VCR if you cease to pay your subscription fees. But yeah — the listings turn out to be pretty important.
That the cable company charged a monthly cablecard rental fee is perhaps a little more irksome, but when you consider how low it is (I think I pay $1 or $2 per month) and figure in the costs Comcast incurs when dealing with support requests for products they don’t even sell, it’s not that unreasonable.
October 20th, 2008 at 2:50 pm
With open source coding, your average programer could write a script to download your local tv listings for free. The schedule is widely available on all kinds of websites, not some proprietary information that justifies charging those kinds of rates.
According to this, the current best-practices MythTV solution is…to recommend that the user pay for the data. ($20/year, admittedly pretty damn cheap.) Turns out it’s not so easy to keep it all up to date for every market in the USA, and the previous “open source” solution was to swipe it from websites that had paid for the data.
October 20th, 2008 at 2:52 pm
With open source coding, your average programer could write a script to download your local tv listings for free.
Indeed, that programmer can and does, albeit in a way that is a bit fugly and bumps into rights issues. Now, you can argue the toss about whether the places that supply local listings should be paying their sources for the privilege — TiVo doesn’t get its listings information for free — but we end up running into the kind of discussion of what entails fair use, as seen when dealing with feeds from news agencies.
In the meantime, the current breed of TiVos offers a fair bit more than just the listings. And yet, it’s probably going to get swallowed in the mid-term, because enough of its innovations have been absorbed (albeit with wildly varying levels of execution) into the proprietary boxes.
Now, there’s certainly an argument that the tied-to-service model becomes problematic in that respect, because a newer TiVo without a service provider becomes dead tech unless there’s a way to open it up.
October 20th, 2008 at 2:56 pm
Is TiVO+Cablecard service the same as the Comcast DVR? Do you get the comcast pay-per-view (ie OnDemand) programming via the TiVO?
October 20th, 2008 at 3:02 pm
Roy: no, no OnDemand. It’s too bad, but sacrifices must be made.
The situation with MythTV and listings is very strange. For a while the service from which the listings were getting scraped (Zap2It, I believe) allowed their use if users took an occasional survey. I guess that deal has ended. Still, strange that this data isn’t publicly available for free — it shouldn’t be that hard to put together. One would think that the various parties that need that sort of data would be able to agree to maintain a single, centralized database of listings. This would doubtless save them money, and also remove listings-as-a-competitive-advantage, opening the door to giving customers that data for free. But my impression is that this isn’t how things are currently done.
October 20th, 2008 at 3:30 pm
Tivo and the cable companies can get away with charging a DVR service fee only because there isn’t enough competition yet. That’s bound to change eventually. TV listing information is freely available from a variety of sources. There’s no fee involved with the Windows Media Center DVR.
October 20th, 2008 at 3:43 pm
Would anyone here who has used both Comcast (or Time Warner–AFAIK the software is very similar) and TiVo explain the features of the TiVo interface that make it so clearly superior to the cable companies’ DVR software?
I’ve been a Comcast DVR subscriber for several years, and I can’t imagine watching TV without DVR capabilities. That isn’t at all to say that I think the Comcast interface is fabulous or impossible to improve upon; I’m just curious to know exactly how the TiVo software is better.
October 20th, 2008 at 4:17 pm
Would anyone here who has used both Comcast (or Time Warner–AFAIK the software is very similar) and TiVo explain the features of the TiVo interface that make it so clearly superior to the cable companies’ DVR software?
Nicer looking, better organized, easier to navigate, more intuitive, better search capabilities. I think a lot of Tivo fanboys exaggerate the difference, though. Tivo is the Mac of DVRs, and it appeals to the same elitism that fuels Mac sales.
October 20th, 2008 at 4:24 pm
It works pretty well, but the service they provide is markedly inferior to that offered by the TiVo HD DVR.
I got TiVo in early 2005. Switched to the Comcast DVR about a year ago. I honestly prefer the latter. I recall a few advantages to TiVo, but I also found the Comcast DVR had a few advantages as well.
Anyway, I’m likely the only person in the world who actually was pleased with the switch from TiVo, but there you have it. (in general I’m not crazy about Comcast as a company, and I think they’re horribly overpriced; I’m confining my comment solely to the DVR vs. TiVo aspect).
October 20th, 2008 at 4:24 pm
I am using one-way cable cards from Time-Warner in Milwaukee. No on-demand or pay-per-view. The new twist is that now several of the HD channels require two-way cable cards that Time-Warner does not offer. Supposedly the reason for this change has to do with the mandated switch to digital. They use bandwidth sharing to send fewer HD channels down the pipe at the same time. This makes Discovery HD, HDNet, Food Network HD, and a few others unavailable on one-way cable card. Supposedly they are working on a solution to allow Tivo to ask for the channel it wants. The cynic in me expects basically a regression to 20 years ago, with the digital equivalent of a cable box you can only tune manually, and VCR tuned to channel 3. Unless two-way cable card is mandated by the feds, I expect the solution will be a hack that meets the minimal requirements of the law, and adds a monthly fee. We’ll see.
October 20th, 2008 at 4:35 pm
Tivo is the Mac of DVRs, and it appeals to the same elitism that fuels Mac sales.
Yes, it does remind one of the PC vs Mac wars.
Nicer looking,
I guess a bit…
better organized, easier to navigate, more intuitive, better search capabilities.
Here are the meat and potato arguments, and its here I honestly don’t see much — or perhaps any — advantage with TiVo. I guess to each his own. But I simply don’t recall TiVo being easier to operate than my current DVR is. In full disclosure, I have ten year old non-HD TV, so maybe I’d notice more of a difference were I to upgrade. But one of the very first differences I noticed about Comcast DVR that I preferred was the ability to keep watching live or recorded content while you navigate the menus (I hear TiVo has since incorporated this feature, but you have to admit that’s a point on the innovation scale for DVRs) via a screen-within-screen. Also, the series II I owned couldn’t record two shows at once (there might have been a work around, but it sounded mighty complicated).
The main — and I’d say HUGE advantage for the DVR — is its non-reliance on the web or phone to download programming information. Not a big deal, you might think (who doesn’t have broadband these days?), but I opened my own office at about the same time I dropped TiVo. Long story short, the office is so close to my condo that I dispensed with a home broadband connection, and regrettably all my neighbors encript. Without broadband (and needless to say I don’t have a land line either) TiVo is worthless. Also, that cool queuing feature that lets you fast forward through commercials isn’t unique to Tivo. Although Comcast DVR doesn’t feature it, my brother’s Verizon FIOS service does.
October 20th, 2008 at 4:35 pm
Common mistake: All CableCARDs are capable of two-way communications. It’s the devices that are one-way or two-way. I explain it in more detail on our blog.
October 20th, 2008 at 5:11 pm
The thing that bugs me about the Comcast DVR is that it saves the rebroadcasts of “The Daily Show” as well as the originals. Granted, this could be due to flaws in the way the DVR interprets the listings, but I wish it would only record the 11pm showings.
Actually, you can program a button on your remote to advance 30 seconds at a clip. Google “comcast remote fast forward”. I now find myself amused at the 3-minute commercial blocks in TDS.
October 20th, 2008 at 5:24 pm
So, people who have cable, but no internet or phone lines, can’t get TiVo. I wouldn’t call that a HUGE advantage for DVRs, as you are the only person I have heard of who doesn’t have at least one of the two. Sure, it’s a critical flaw in your particular case, but not something that would steer most people away.
Here’s a suggestion for anyone else in Jasper’s situation, who would prefer a TiVo: Get a TiVo wireless adapter. Ask one of your neighbors if you can use his wireless for TiVo purposes only. You can even have him enter his password on your TiVo while you’re in another room, so that you can’t access his internet otherwise. Give your neighbor a six-pack for his thoughtfulness.
October 20th, 2008 at 5:37 pm
I’m not sure that your history of DVRs is quite accurate. I think Replay and TiVo both came out in ‘99 and the cable companies were offering set-top boxes with DVR capability around that time or shortly thereafter (my memory is hazy on this).
Given that CableCARDs weren’t deployed until 2003 (I think mid-year or so), I think it’s incorrect to state “CableCARD leads to the viability of TiVo.”
Recall also that TiVo has moved away from primarily selling hardware and is now licensing its technology, so that multichannel video providers can offer the TiVo service to their customers.
October 20th, 2008 at 6:07 pm
Having used both Tivo (with DirecTV) and Comcast DVR, interface wise it’s pretty much a toss up. I guess Tivo might look a little fresher, but I have no problems visually with the DVR. Where Tivo is superior, though, is its ability not to totally screw up everything at a moment’s notice. Once my Comcast box recorded one 30 minute sit-com, then proceeded to record the next 16 hours of that channel, until it erased everything saved on my DVR. Then there was the time last week where all my shows got mysteriously erased. Never had those problems with Tivo.
But I wanted to be able to record two HD channels at once, and couldn’t afford the Series III Tivo and didn’t want to deal with the horrors of CableCards.
October 20th, 2008 at 6:14 pm
What about satellites?
I am renting DirecTV’s DVR. I actually have two: one comes for “free” with the level of programming I have, and the second costs $5 extra per month. I am not at all impressed with their user interface, and it’s irritating that they can’t talk to each other (i.e., you can’t watch on TV A what was recorded on TV B’s DVR).
I was under the impression that DirecTV’s signal is scrambled in some way that third-party DVRs would not work. Is that not true? Does this law apply to them?
October 20th, 2008 at 8:04 pm
The Mac/PC analogy doesn’t really work: S1 TiVos are highly hackable, and S2s a fair bit, so you can link to third-party networked services, use third-party tools to archive shows, and have a streaming server running on a desktop box to play or convert your own digital media. To my knowledge, you can’t upload your own stuff to a proprietary DVR, and downloading is tricky. (As far as alternatives go, XBMCP is pretty nice, though.)
October 20th, 2008 at 8:41 pm
Matt: “But the magic of market competition only works in the first place thanks to savvy regulations.”
Uh, yeah – and the world started when I graduated from Harvard.
Moron.
The degree to which that statement is unbelievably stupid cannot be measured by instrumentation known to science. It can only be approximated by Matt’s other posts on this topic.
October 20th, 2008 at 8:49 pm
The Mac/PC analogy doesn’t really work: S1 TiVos are highly hackable, and S2s a fair bit, so you can link to third-party networked services, use third-party tools to archive shows, and have a streaming server running on a desktop box to play or convert your own digital media.
It’s not an analogy to “hackability,” it’s an analogy to the market for the product. Like the Mac, Tivo appeals to snobs. Most people will opt instead for the lower-priced generic DVR offering from their cable or satellite company.
To my knowledge, you can’t upload your own stuff to a proprietary DVR, and downloading is tricky. (As far as alternatives go, XBMCP is pretty nice, though.)
October 20th, 2008 at 9:04 pm
Thanks for the responses, all.
Golux, I’m confused:
Very odd–on my Comcast DVR, anytime I choose to record multiple episodes of a given TV show (and I, too, record “The Daily Show” every night), the Comcast DVR gives me a choice of recording (1) “First Run only on this channel,” (2) “On this channel this day in this time slot,” (3) “On this channel at any time,” or (4) “On this channel any day in this time slot.” Either option (1) or option (4) would clearly give you what you say you can’t get, while it sounds like you’ve only got (3).
This setup is far from perfect–for example, in options (2) and (4), the software will only allow you to set a single time-slot per channel per show; so you can’t pick two (and only two) of TNT’s many daily “Law & Order” episodes, or two NFL football games on CBS, with (2) or (4). And of course the whole contraption screws up occasionally and fails to record something. (I lost Obama’s June nomination-victory speech that way.) But the flaw you cite here is one that doesn’t exist on my Comcast DVR.
Could there be different generations/versions/regional varieties of Comcast DVR software?
October 21st, 2008 at 12:05 am
It’s not an analogy to “hackability,” it’s an analogy to the market for the product.
Even if you limit it to that silly clichéd view, it’s still a bad analogy. Though it’s amusing to see the silly glibertarian playing the ’snobbery’ card.
October 21st, 2008 at 12:39 am
Even if you limit it to that silly clichéd view, it’s still a bad analogy.
The idea that lots of Mac owners are elitist snobs who buy the machine not for its supposed technical or design superiority but because they like to think of themselves as cool and hip and different is not a “silly cliched view,” but an accurate and widely-held one. And Apple constantly tries to cultivate the association between buying its products and being trendy and hip in its advertising. You’re a classic victim yourself.
Though it’s amusing to see the silly glibertarian playing the ’snobbery’ card.
Coming from someone who combines insufferable snobbery with invincible ignorance, that’s quite something.
October 22nd, 2008 at 11:07 pm
Your logic that proper regulation of a free-market is the basis for the special card is obnoxious. The cable market is not a free-market. Therefore, legislation dealing with the cable market is not legistlation dealing with the free market.
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