Unplugging Plug-and-Play Regulation

by on October 23, 2007 · 6 comments

I have a new paper out this week entitled “Unplugging Plug-and-Play Regulation” in which I discuss the ongoing dispute between cable operators and the consumer electronics industry over “digital cable ready” equipment and “plug-and-play” interactive applications. Basically, it’s a fight about how various features or services available on cable systems should work, including electronic programming guides (EPGs), video-on-demand (VOD), pay-per-view (PPV) services, and other interactive television (ITV) capabilities.

This fight is now before the Federal Communications Commission where the Consumer Electronics Association (CEA) has asked the agency to mandate certain standards for those next-generation interactive video services. In my paper, I argue that regulation is unwise:

Ongoing marketplace experimentation and private negotiations represent the better way to establish technical standards. There is no need for the government to involve itself in a private standard-setting dispute between sophisticated, capable industries like consumer electronics and cable. And increased platform competition, not more government regulation of cable platforms, is the better way to ensure that innovation flourishes and consumers gain access to exciting new services.

To read the entire 7-page paper, click here.

  • eric

    In the world of high definition audio, the lack of standardization did not lead to innovation and exciting new services. It led to the languishing of two competing formats, SACD and DVD-Audio. The current fight between two high definition video formats may delay the mass market penetration of any hi-def video disc. Virtually everyone loses.

    A plethora of non-interoperable choices may lead to some kinds of cable or online video services being virtually unavailable, since none will ever “catch on” with the consumer.

    Even in the VHS versus Beta videotape battle, VHS won and was arguably the worst choice, qualitywise.

    Freedom is great, but when you need a mass market application, standardization becomes a crucial consideration.

  • eric

    In the world of high definition audio, the lack of standardization did not lead to innovation and exciting new services. It led to the languishing of two competing formats, SACD and DVD-Audio. The current fight between two high definition video formats may delay the mass market penetration of any hi-def video disc. Virtually everyone loses.

    A plethora of non-interoperable choices may lead to some kinds of cable or online video services being virtually unavailable, since none will ever “catch on” with the consumer.

    Even in the VHS versus Beta videotape battle, VHS won and was arguably the worst choice, qualitywise.

    Freedom is great, but when you need a mass market application, standardization becomes a crucial consideration.

  • http://www.wbklaw.com Mike Sullivan

    Isn’t it also possible that the two HD audio formats have “languished” not because of the fact that there are two competing formats, but because there is limited demand for HD audio recordings at a premium price?

  • http://www.wbklaw.com Mike Sullivan

    Isn’t it also possible that the two HD audio formats have “languished” not because of the fact that there are two competing formats, but because there is limited demand for HD audio recordings at a premium price?

  • eric

    Chicken vs. egg? If there was one HD audio standard and prices were reasonable (many SACD hybrids — SACD and CD audio in one disc — are actually no more expensive than regular CDs), would not people be more apt to buy?

    But yes, it is possible that few people want HD audio. Perhaps the fact that both formats are infested with DRM is also a drag on the market.

    I’m just saying that having two competing standards is not a positive factor in getting that market established. It isn’t the only factor, obviously.

  • eric

    Chicken vs. egg? If there was one HD audio standard and prices were reasonable (many SACD hybrids — SACD and CD audio in one disc — are actually no more expensive than regular CDs), would not people be more apt to buy?

    But yes, it is possible that few people want HD audio. Perhaps the fact that both formats are infested with DRM is also a drag on the market.

    I’m just saying that having two competing standards is not a positive factor in getting that market established. It isn’t the only factor, obviously.

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