There have been quite a few announcements in recent months about cable’s progress towards deploying tru2way, but unfortunately, there continues to be some confusion in the blogosphere about the future of CableCARDs and exactly how tru2way devices will work.

For example, I see tru2way described as “CableCARD 2.0,” which is cute but not technically correct. I see questions about when there will be a “two-way CableCARD,” when in fact all CableCARDs are capable of accessing two-way cable services such as video-on-demand. I see people expressing expectations that the introduction of tru2way means that CableCARDs will go away, when in fact tru2way devices require use of CableCARDs.

It’s great to know that so many people are passionate about these issues, but the misinformation is a little frustrating.

I thought I would back up and walk through a very brief history of CableCARDs and tru2way, so as to hopefully clear up this confusion.

The Beginning of CableCARDs
In the Telecommunications Act of 1996, Congress sought to foster competition in the set-top box market by enacting a new provision of the Communications Act, section 629, whose purpose was to make set-top boxes available for retail purchase. Specifically, that provision called on the FCC to adopt rules to ensure the commercial availability of “navigation devices” (e.g., a set-top box). But you couldn’t jeopardize the signal security of the provider (e.g., your local cable operator).

The FCC determined that this could be accomplished by separating security (i.e., conditional access) from the function of the device. The security functions would instead reside in a separate security module that you would get from your local provider. These security modules were first known as Point-of-Deployment (POD) Modules and later were named CableCARDs.

An FCC order in 1998 required the cable industry to develop PODs which it did by 2000, but, for a variety of reasons, there were no retail devices built with which the PODs were intended to work. By December of 2002, a “Plug & Play” agreement was reached between major cable operators and major consumer electronics companies setting the stage for the release of the first wave of devices – such as digital “cable ready” television sets – which would work with CableCARDs. These DTVs could be sold (and moved) anywhere in the country and allowed cable subscribers to receive one-way digital cable services without the use of a set-top box by obtaining a CableCARD from his or her cable operator. CableCARDs allowed cable customers to view encrypted digital programming after being authorized to do so by the cable operator.

That “Plug and Play” agreement took effect in the Summer of 2004. As of August 2004, there were approximately 700 CableCARDs deployed by the top 10 MSOs. NCTA just reported new numbers to the FCC and we found that there are 372,000 CableCARDs that the top 10 operators have supplied to date to customers who requested them for Digital Cable Ready TV sets or other CableCARD-compliant products, such as some TiVo digital-video recorders.

In addition, as a result of the FCC’s “integration ban” requiring that cable operators use CableCARDs in their own leased set-top boxes, we just reported that major cable operators have deployed more than 6.2 million digital set-tops with CableCARD conditional-access systems since July 2007.

One-way versus two-way
It’s good to stop here and point out that the 2002 agreement was an agreement for building devices to access one-way cable services such as linear (e.g., TNT, ESPN) and premium (e.g., HBO, Showtime) digital channels, including high-definition channels, but not two-way (“interactive”) services such as video-on-demand.

The reasons for this are long and involved and include technical, business and legal issues, but the short answer is that the cable and CE industries decided to adopt a one-way agreement as a first step to a “two-way” agreement. But agreement on a two-way agreement proved to be much more difficult and complex than a one-way agreement.

In particular, two-way services involve high-value content and we have three affected industries: cable, content providers (such as studios) and consumer electronics manufacturers. Not all of the companies within each industry have all the same views and not all of these industries have the same views. It’s a hard thing to accomplish.

The Story of tru2way
Now, I need to back up one more time and point out that something else was going on at almost exactly the same time. In the fall of 1997, came the beginning of the cable industry’s OpenCable project. Its mission was to provide a set of hardware and software specifications for the next generation of cable’s set-top boxes and other two-way devices. The software involved was called the OpenCable Applications Platform or OCAP, now known as tru2way. The tru2way hardware and software forms the basis for interactivity in two-way retail devices, as well as cable operator devices, and is used in conjunction with – not as a substitute for – CableCARDs which are still needed to provide access to secure cable services.

These are two separate stories
Now, let’s put it all in context. CableCARDs came from a government mandate to separate security from “channel surfing” functionality in set-top boxes, making them available at retail. The CableCARD itself can handle one-way or two-way communication, but the first Digital Cable Ready sets were one-way, because that’s all that was negotiated.

Meanwhile, tru2way comes from a decade of development and was focused on developing specifications that would allow interactive services to be deployed – and interactive services are two-way by definition. Two-way Plug & Play negotiations have been going on for some time, since the one-way agreement was finally settled.

In the meantime, the tru2way specification emerged as an option for building two-way Digital Cable Ready devices. Major CE companies such as Panasonic, Samsung, LG, and Sony have agreed to use tru2way technology to build two-way Digital Cable Ready devices (IT companies such as Intel have also endorsed tru2way). And, as noted, tru2way devices still require a CableCARD for security.

After all, without such security, you can’t have content. Cable operators typically have contracts in place that they have to guarantee conditional access and other limits on unauthorized distribution.

So, there you go. It’s understandable that there’s confusion over CableCARDs. After all, customers with Digital Cable Ready devices represent probably less than 1% of cable customers. But I hope this post will serve to bring some clarity to the issue. If anyone wants a more detailed history, the best one I have seen can be found here.

NCTA President & CEO Kyle McSlarrow will participate in a National Press Club “Newsmaker” Media Briefing today at noon (ET).

In his address, entitled “Cable’s Broadband Platform: Innovation for the Consumer,” he is expected to challenge the notion that there is a rivalry between innovation taking place at the edge of or in the network. In contrast, he will discuss the notion of an interactive “Internet ecosystem.” He will also discuss new developments in tru2way.

His speech will be webcast through this link [Archive available at this link for 6 months].

UPDATE: It’s also being streamed at C-SPAN’s site. The text of the speech has been posted at NCTA’s website.

During our recent conference, The Cable Show, I took a camera over to CableNET, a technology exhibit that’s been held for 16 years. Its goal has always been to show “…next-generation broadband technologies and services that cable operators are expected to deliver to consumers in the near term.”

I wanted to capture something about tru2way, since that set of technical specifications has been in the news lately. This video attempts to show that there are three key parts to tru2way: consumer electronics, such as TV sets or other devices; applications, which can be written once and then run anywhere; and cable operators, who would then support tru2way on their networks.

Earlier today, we issued the announcement: Sony Electronics and Major U.S. Cable Operators Negotiate National “Two-Way” Plug and Play Solution.

Here’s some of the coverage:

• Sony Embraces tru2way
• Sony, Cable Bury Two-Way Hatchet
• Sony signs up to support tru2way
• Sony to Build ‘Tru2way’ Interactive TVs
• Sony + Tru2way = No More Set-top Boxes?
• Sony commits to ‘Tru2way’ TV

For more on tru2way, watch this CNBC interview with CableLabs’ President & CEO Dick Green that took place at our recent annual event The Cable Show.

I neglected to mentioned that Brian Roberts had three guest appearances as part of his presentation. Toshihiro Sakamoto, President of Panasonic AVC Networks Company, came out to talk about the two tru2way-enabled HD sets that will be available later this year, as well as the AnyPlay device. The ubiquitous Ryan Seacrest came out to chat up the new Fancast service and let slip a couple of colorful ad-libbed remarks that might have been of interest to fans of Kevin Bacon, Justin Timberlake and Andy Samburg.

Saving the best for last, the event was closed out by New Zealand’s fourth most popular guitar-based digi-bongo acapella-rap-funk-comedy folk duo Flight of the Conchords. As seen in the photo, Bret McKenzie and Jemaine Clement showed off their integrated media center, which consisted of a disposable camera, taped to a cell phone, and then thrown on top of a TV equipped with rabbit ears (antennae augmented with foil).

They closed by singing their hit song of seduction, “Business Time.” You can see a video of them performing that song on another occasion.

UPDATE: I am reminded that they then added a toothbrush to their converged device by placing a toothbrush on top of the TV as well.

UPDATE #2: You can now see the video of their performance by clicking here and then fast-forwarding to the last 12 minutes.

I’ve been to CES a few times over the last five years. On my first few trips, it did seem a little odd to notice cable’s absence. Comcast Chairman & CEO Brian Roberts described a very similar experience in his keynote this morning, talking about walking the show floor a few years ago with Time Warner Cable’s Glenn Britt. As Roberts put it, “Cable was almost invisible.”

Following that experience, the cable industry reached out to the consumer electronics industry. He said that they heard complaints that cable was a regional business that operated in silos, that cable set-top boxes are closed and proprietary, and that, in general, cable made it too tough to innovate and to create products and services that could be sold in the retail environment. This morning’s address seemed a valuable pay-off to those efforts, with Roberts describing cable as a real partner to consumer electronics and retail.

He went on to describe the latest stage of his company’s development: Comcast 3.0. As part of the new Comcast, he said they were committing to a series of issues:

• Having the best fiber optic networks and IP infrastructure
• Delivering superior experience in hi-def and interactive
• Providing new levels of excellence in customer service
• Being a leader in innovation by providing “products and services that are converged, plug-and-play, user-friendly, and most important, easily open for third-party innovation.”

Many in the cable industry have debated over whether content is king or distribution. Roberts said that today the answer is clear: The consumer is king. The best way to serve consumers is by offering a wide array of choice.

He went on to profile such new services as wideband, Fancast, Project Infinity, the AnyPlay portable DVR, and the SmartZone communications center. You can read about the details elsewhere, but the important feature was that Comcast was preparing to offer more video that could be consumed in a more flexible fashion, more bandwidth and more features on its communications services. In a word: more.

On May 8th of last year, during NCTA’s annual Cable Show (also held in Las Vegas), Roberts demoed a DOCSIS 3.0 Cable Modem capable of delivering 160 Mbps using its “channel bonding” technology. You can see a video of that demo here and, as a sign of how far we’ve come over the last decade, you can also see Roberts demo a high-speed cable modem in 1996. Look at how fast the photos download! Check out the White House website!

Earlier this morning I attended the keynote address given by Brian Roberts, CEO of Comcast. Paul did as well, and I suspect he’ll post himself, but it’s probably good to get two different perspectives. Engadget covered the proceedings as well.

Roberts began with a trip down memory lane. He told of a walk through the CES show floor he took with Glenn Britt, CEO of Time Warner. They were surprised to see the proliferation of devices that leverage cable’s platform, yet cable had virtually no presence at the event.

Cable, through CableLabs, began to reach out to the consumer electronics industry. As cable modems became available at retail, cable broadband took off.

Today we’re announcing the age of the closed proprietary set-top box is behind us.

Today Cable is employing a similar approach to TV and this week Panasonic and Comcast announced <tru2way>, the open standard for cable. This year <tru2way> will be rolled out to cable systems across the country and consumers will be able to purchase televisions with <tru2way> that plug directly into the cable network with no set-top box, no extra wires, and access to cable’s interactive services. <tru2way> offers an open platform for development with open APIs and a Java based system.

<tru2way> will be supported on MS Media Center PCs as well with all cable content, including program guide and OnDemand, accessible through the Media Center system.

AnyPlay

Roberts introduced Panasonic’s Toshihiro Sakamoto to introduce AnyPlay - a new set-top box with removable DVD and DVR capability. AnyPlay is a take and go device that connects to a docking station when working as the set-top box, but can be lifted out and taken as a portable media player for watching media at home or on the road. The device is about the size of a portable DVD player, but has DVR functionality embedded as well.

Roberts recognized his father, Richard Roberts who originally founded Comcast in 1963 as a 1,200 subscriber system in Tupelo Mississippi, offering 5 channels (twice as many as were available over the air).

The original premise then, as now, is “choice sells”.

Comcast began offering On Demand video services with 250 viewing choices. That increased to 1500 in a year. Now more than 10,000 viewing options are available every month. Comcast is now the largest provider of OnDemand in the world. 90% of their content is free. Customers using OnDemand have accounted for 6,000,000,000 views since launch - twice the number of iTunes downloads and six times more than NetFlix.

What’s more is OnDemand is only available to 15 of 25 million Comcast homes, but they have plans to roll out to everyone.

Beyond that, however, Comcast announced plans to provide 1,000 HD choices in every HD home by the end of 2008 (versus 150 for DirectTV). 2008 also begins rollout of a new system architecture, with 6000 movies on demand, 3000 in HD.

As they continue to grow Comcast is launching Project Infinity. Project Infinity is expected to scale well beyond 10,000 OnDemand options “to provide every piece of video content that a producer wants to put on TV – every movie, any TV show, any conceivable kind of video… it’s a content hungry consumers dream. You’ll never want to get off the couch.”

Comcast is also changing the communications experience. As the 4th largest phone company in America, Comcast serves more then 4 million customers. They’re rolling out new features like caller ID to the TV and integrated messaging on the web through a new feature called SmartZone.

SmartZone - introduced, via video, by Dennis Miller - integrated e-mail and voicemail in one inbox and integrates with another Comcast service called Fancast - a video and entertainment portal.

Ryan Seacrest joined Roberts on stage to introduce Fancast.

Fancast is not just another entertainment site. It’s a personal experience site with 3,000 hours of streaming videos, 10,000 movie trailers, and 11 million pages of entertainment. It provides personal recommendations based on your entertainment consumption (like Amazon). and it allows you to remotely control your DVR to record programs you’re looking at online.

Roberts used the discussion of Fancast to demonstrate cable’s new DOCSIS 3.0 cable modem standard with speeds in excess of 160 Mbps planned for rollout this year. Seacrest and Roberts downloaded a 2 hour HD movie in 4 minutes during the presentation - a download that would have taken 6 hours via DSL and 7 days on dialup.

After a couple of questions from audience members, Roberts introduced HBO’s Flight of the Conchords for a performance.

The presentation was well received by the audience including much applause for the new Comcast services, wideband cable modems and <tru2way>. We’ll try to get video of the event and put it online for you.

Update: Comcast has the video (minus the performance by Flight of the Conchords) here. And you can get a copy of the prepared text here.

2nd Update: New version of the video available, which includes Flight of the Conchords.

It’s official as of this morning. CableLabs announced that the “tru2way™” brand will replace use of the term “OpenCable Platform.” You may recall that the initiative, which began back in ‘97 with the goal of helping the cable industry deploy interactive services, was previous known as OCAP.

Why the name change?

The tru2way brand was developed by the global brand consulting firm Siegel + Gale, in consultation with the Cable & Telecommunications Association for Marketing (CTAM), the National Cable & Telecommunications Association (NCTA), and marketing and technology representatives of a variety of major cable providers.

Which basically means that, based on talking with consumers, it was felt that a new name would help with branding. Manufacturers can then make products under that name.

For example: Panasonic and Comcast Announce Products With Tru2way(TM) Technology. Specifically, this means that you’ll be able to soon be able to get a portable DVR which you can take on the road, watching those TV shows you recorded.