CE industry surprised at Panasonic's DTV-cable deal

Copyright 2002 Warren Publishing, Inc.
Communications Daily...10/21/2002
From LexisNexis

Mark Seavy

Consumer electronics executives reacted with shock and dismay to Panasonic's signing of the POD-HOST Interface Licensing Agreement (PHILA) last week, but said it wouldn't affect negotiations with cable industry on interoperability standards. Proposed standards are expected to be submitted to FCC in early Nov., a source said. "I don't think it will have any impact on the cable negotiations and we still expect to put an agreement in front of the FCC," source said: "The agreement will be vastly different than what Panasonic has agreed to as a company." CEA Video Div. has been negotiating with the cable industry on interoperability standards for three months.

The PHILA agreement will allow Panasonic to manufacture and market TVs that can directly receive high-definition (HD) and other digital programming via cable, first of which could be available as soon as next fall in 36" and larger sizes. Developed by CableLabs, POD-Host Interface provides standardized secure communications link between POD (point of development) module and host DTV. Panasonic Chief Technical Officer Paul Liao told us the decision to sign PHILA licensing agreement with CableLabs shouldn't "derail" CEA-cable industry negotiations and would "support it by showing that the CE industry is not just posturing and in our case ... we've done what is necessary to get our products to market." Panasonic, he said, is "strongly in support of broad agreement" between cable and CE industries.

PHILA licenses will be "defined company by company," Liao said. Other CE companies are said to have had discussions with CableLabs, with Panasonic just first to reach agreement. Panasonic's agreement is for unidirectional device so "most of the tough issues don't really apply," he said. For example, issues involving encoding rules and selectable output controls (SOC) don't apply to unidirectional products, "so we haven't changed our position and there is no difference within Panasonic," Liao said.

SOC emerged earlier this year as battleground between CE and cable. It's proposed feature of set-top boxes that would allow cable operators to remotely disable ability of box to feed content to various devices and allow for only low- resolution transmissions. Cable has said SOC is needed for it to remain competitive with other distributors, while CE industry has countered that it betrays "assurances recently given to the Congress and to the consumers." While CableLabs has posted a version of the PHILA licensing agreement on its Web site, terms of the Panasonic pact are contained in a confidential sideletter that will be available to other companies on a nondisclosure basis, Liao said. The timing of Panasonic's agreement with CableLabs "wasn't driven by any particular issue," Liao said.