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Microsoft’s new Xbox One console can do a lot of things besides play games. It can control live TV; it can access over-the-top content; it can serve up second-screen and supplemental material while you’re watching TV; it can communicate with your smartphone or tablet using SmartGlass.
Insofar as that criticism is aimed at Microsoft, it’s unfair. Microsoft is simply working within the constraints imposed upon it by technical and regulatory factors beyond its control. If the Xbox One comes up short as a true, all-in-one entertainment center, it’s due to the intransigence of pay-TV operators and the fecklessness of the Federal Communications Commission more than to any design decisions made by Microsoft. If the limitations of the Xbox One highlight anything it’s the still-unmet promise of true interoperability between subscription video services and third-party set-top devices mandated by Congress in the 1996 Telecommunications Act.
In order for the Xbox One to access a pay-TV provider’s on-demand content, or program a DVR in compliance with a user’s pay-TV subscription plan, the console would need to integrate with the service provider’s conditional access system. Currently, the only way to do that would be via CableCard, the standalone plug-in containing conditional access and digital rights management information cable operators have been required to provide since 2004, or through some sort of downloadable security system.
Microsoft could have included a CableCard slot in the Xbox One, but it would have added expense to the device, and anyone who has tried to install a CableCard on a TiVo knows the technology is often balky. It also requires the use of a proprietary operating system, which would also have to be integrated with the console.
The CableCard mandate, moreover, doesn’t apply to satellite TV or IPTV services from the telcos. Relying CableCard for interoperability would severely limit the market for the Xbox One. The European and Japanese versions of CableCards also have technical differences from U.S. cards, which likely would mean separate builds for those markets, further adding to costs.
As for downloadable security, there is no standard for that at all, which would mean potentially having to integrate with multiple systems from multiple service providers with no certainty as to the chipsets or other components necessary.
So Microsoft turned to the only standardized interface available to it — HDMI — but that meant a one-way pipe and no conditional access integration.
It didn’t need to be that way. CableCards have been around for a decade. But cable operators have always resisted the idea of opening their systems to third parties and they managed to slow-walk the CableCard rollout to the point where most consumer electronics companies gave up on the technology and stopped including CableCard slots in their devices.
Moreover, the first generation of cards were one-way only; they did not support interactive services. A specification for CableCard 2.0, which would support interactive services, was proposed in 2006, but was rejected by cable operators and the effort stalled.
In 2010 the FCC proposed a new, standardized digital video “gateway” to replace the CableCard called AllVid that would apply to all multichannel video program distributors (MVPDs) and would support broadband-delivered video as well as cable, satellite and IPTV. The goal was to allow hardware makers to create devices that would fully integrate linear and over-the-top video and support a full range of interactive services. Were AllVid a reality, there seems little doubt that Microsoft would have leveraged it for the Xbox One, just as Google would for Google TV, and Apple, and Roku, and Sony, and Boxee, and everyone else trying to figure out the connected living room.
Once again, however, push-back from the pay-TV providers has been fierce and the FCC has again allowed the proceeding to languish. Operators point to Comcast’s and Verizon FiOS’ integration with the Xbox 360 and the Dish and Time Warner Cable apps available on Roku boxes as evidence that the industry is already moving toward greater integration with set-tops, making the AllVid mandate unnecessary.
But those individually negotiated deals are no substitute for the sort of robust, open competition among set-top box makers to create a better consumer experience that a standard interface would enable — and that has actually been the law for the past 17 years.