FCC fines Time Warner Cable for leaving CableCARD customers in the dark
Two related things happened on Monday. Time Warner Cable cut off moved both of my high-definition ESPN channels to a new HD tier -- a tier where many of the channels were off-limits to me because I had dared to exercise some consumer choice. And, I got a chance to look at that FCC ruling last week that slapped Time Warner with a $20,000 fine for doing to its customers in Hawaii what they've been doing to me.
UPDATE: Time Warner did a whole channel shuffle this week. Read my update.
As I've written about before, I am one of a tiny minority of people who decided to buy a TV recording device that uses the new CableCARD technology. The CableCARD was designed to cut down on the number of ugly black boxes that are plopped on top of (or below) your TV set. Instead, you insert a little credit-card-sized receiver into a CableCARD-equipped TV or other device, and off you go.
That was the idea, at least. From the get-go the cable industry was not enthusiastic about being told to support the CableCARD. Cable operators have their reasons, as I've recounted before, and they may be valid ones. It took years to get CableCARDs here in Kansas City, and even then, customers must rent them (albeit for 80 percent less than what they pay to rent a cable box).
Beginning in late 2007, however, Time Warner and other cable operators began to implement something called switched digital video or SDV. All you need to know is this: SDV is two-way. But the CableCARD that Time Warner rents me, when inserted into my TiVo, only communicates one-way, as a receiver. I can't send anything back to the cable plant, which means I -- and anyone else relying on a CableCARD -- can't use SDV.
Why is this a big deal? Because Time Warner started moving dozens of what it calls "lesser-watched channels" onto its SDV platform to save bandwidth. Channels like BBC America, Sundance Channel ... and now, bunches of HD channels as well.
Can they do this?
Before I get to that question, let me just say that I am aware of my own motives here. And as a journalist, I'm instructed to put my readers' interests first and foremost -- and especially not to put my interests above my readers'.
The reality is that (according to Time Warner) only 1,200 customers in the Kansas City area rent CableCARDs from them. That's less than one percent of its subscriber base. So the argument here is that Time Warner is being squeezed by an ever-growing list of bandwidth needs: more space for HDTV. More space for pay-per-view and free on-demand channels. And so on.
So in theory, if Time Warner is forced to cater to people like me, it could mean limiting services to the other 99.7 percent of customers. That's not very fair, now is it?
So what are the counter-arguments?
Well, for starters, the law is the law, and Time Warner agreed to support CableCARDs and now it's not. Here's the FCC order spelling it out. I asked Time Warner Cable for a response and here it is: "Time Warner Cable does not agree with the Notice of Apparent Liability for Forfeiture Order and will be responding accordingly to the Federal Communication Commission's Enforcement Bureau."
A persuasive case has been made that Time Warner isn't fully to blame for glitches in the CableCARD rollout. Yet it's hard to sympathize with the cable operator when we now know that a workaround exists that will allow CableCARDs to use SDV. Any TiVo customer with CableCARDs knows this, because TiVo has a setup screen that tells you about it! They're called tuning adapters and they've been tested and are ready to go. But a reader recently wrote to tell me he had spoken with a customer rep and TWCKC has no intention of supporting the tuning adapters. (Time Warner wouldn't confirm or deny this.)
But here's the clincher: Time Warner is charging its CableCARD users the same price for digital cable as all of its other customers -- but is only giving them a fraction of the channels. That fraction is pretty large right now, but with each new HD channel addition to the SDV band, the gap between us and them grows.
with the removal of ESPN HD it really feels to me like a gauntlet has been laid down. I mean, that's hardly a "lesser-watched channel" in my or any other household where there's a guy who likes sports.
A $20K fine doesn't sound like much ... until you multiply it by dozens of systems that Time Warner owns across the country. And it's not just a fine; the FCC is ordering Time Warner to refund customers who were charged money for channels they couldn't get (which was point no. 3 above).
I've sent the FCC order to my pal Nick Johnson, the onetime gadfly FCC commissioner. He once wrote an article in which he reviewed every item on a typical FCC day's docket and showed how the commission had taken the wrong side on every single matter -- aligning with corporate interests against the public interest. I want his reaction because frankly, it's so rare that the FCC actually gets it right, I want to make sure I'm not deluding myself. I'll let you know what he says.
Previously on TV Barn: I interviewed Johnson about the Time Warner cable-box lawsuit, which touches on some of the same issues as this story.
