Audio Video News

Electronics retailers are lobbying Congress to ensure their right to sell broadband cable converter boxes. Wary of the coming dominance of the combined power of merger partners America Online and Time Warner Inc., retailers such as Circuit City Stores, Inc. are seeking legislative help.

Cable providers and the film industry have colluded to prevent retailers from being able to offer the set-top boxes (STBs), Circuit City VP John Froman told members of the House Commerce Committee in a hearing on the matter held the first week of October. Familiar to almost all cable customers, set-top boxes—also known as "navigation devices"—let users select channels and unscramble "premium" programming.

The next generation of boxes will include interactive features such as Internet access and shopping-from-home capabilities, features that will become increasingly important when AOL, the world's largest Internet service provider, officially merges with media conglomerate Time Warner.

Retailers want to be able to compete with cable systems in providing the boxes to customers, but current law favors cable companies because technical specifications for boxes sold by retailers differ from those sold or rented by cable providers. The specs will eventually be the same for all, but not until January 1, 2005. Froman and his colleagues believe that the target date for universal STBs could be moved up three years, to January 1, 2002, thereby "leveling the playing field" for retailers. If the standards question can't be settled quickly, Froman suggested that Congress prevent cable providers from leasing the boxes.

The Walt Disney Company also weighed in on the "open access" issue, as it is known in the cable industry. Disney, owner of ABC TV and a media conglomerate itself, has opposed the AOL-TW merger because of the possibility of discrimination against Disney programming. The issue is one of several under consideration by the Federal Communications Commission and the Federal Trade Commission in their reviews of the AOL-TW merger.