WASHINGTON -- After years of wrangling, the cable and consumer-electronics industries on Thursday announced a deal to make it more convenient for consumers to watch digital television.
The agreement, which federal regulators still must approve, creates a "plug-and-play" standard between digital/HDTV sets and most digital cable systems. It would allow a consumer to hook up an HDTV set directly to a digital cable system without requiring an extra set-top box that could degrade picture quality.
"These discussions were very difficult," said Bob Perry, vice president of marketing at Mitsubishi Digital Electronics America, at a press conference on Thursday. "They were emotionally charged. There has been years of baggage between these industries."
For years, the cable and consumer electronics camps have fought to control the gateway between consumers and digital content. Cable companies typically lease digital boxes to consumers, but Thursday's agreement would allow TV makers to build box components directly into digital TV sets or sell stand-alone digital boxes to consumers at retail outlets such as Best Buy and Circuit City.
Thursday's agreement was signed by the 14 companies that make most HDTV sets and the seven major cable operators that serve 75 percent of cable homes (Cable One, Cablevision Systems, Charter Communications, Comcast, Cox Communications, Insight Communications and AOL Time Warner Cable).
Negotiations, however, didn't include content owners, who worry that individuals could make a perfect digital copy, transfer it to a computer hard drive, and then post it on a peer-to-peer file sharing service.
"It's a balancing act," said Comcast senior vice president, Mark Coblitz. "We were very sensitive to copyright holders' rights, and stealing content is not right."
Nonetheless, the proposal included one aspect likely to meet resistance from Hollywood: It would ban content owners from purposely degrading HDTV signals out of fear that a consumer might make a perfect digital copy.
But while the Home Recording Rights Coalition, an alliance of industry and consumer groups, lauded the agreement's copy-protection stance, Hollywood interests were more cautious on Thursday.
The Motion Picture Association of America said on Thursday that it needed more time to review the details of the agreement, but officials hinted that the proposed encoding rules may not suffice.
"It is important that the FCC and Congress act to provide incentives, the most important of which is protection against theft and unauthorized redistribution, to entice the highest quality programs in digital form," said MPAA President Jack Valenti.
The proposal now goes to the Federal Communications Commission, which will try to draft regulations based on the deal. If all goes well, industry officials said they expect cable-compatible HDTV sets to hit the market in 2004.
FCC Chairman Michael Powell, who has been prodding industries for months to reach an agreement, welcomed the pact and said his agency would "act expeditiously on those requests after other interested parties have had the opportunity to comment."
While many consumer groups are expected to argue that the encoding rules are too restrictive, "(Content owners) ultimately are going to oppose this and say it doesn't go far enough," said consultant Gary Arlen, president of Arlen Communications.
That could lead the FCC to request myriad changes, any one of which could re-ignite fights that have lingered for years between cable and consumer electronics interests.
"As celebratory as this morning was," noted Arlen, "this is not the last step."
