Peter Griffin: One box to rule them all

COMMENT

If the IT and telecommunications sectors have learned anything in the last decade it's that open standards and universal access increase the size of the pie for everyone. We've seen it in the PC market, where thousands of manufacturers and developers make thousands of hardware and software products that, by and large, talk the same language.

We've seen it in the mobile phone industry, where the universal backing of open standards for mobile network equipment and the corresponding handsets has seen the mobile phone become one of the most pervasive fashion accessories in the world. It's as simple as popping your Sim card out and buying a new one in your destination country, or taking advantage of international roaming agreements.

Where you go, your phone and PC can go too and a host of network operators, internet providers and application servers will be waiting for you, eager to take your credit card number.

Such universality is still missing from TV sets and DVD players. The TV world is divided into NTSC and PAL (the former an inferior standard backed by the US).

The DVD world is still carved up by zoning, which fulfils the copyright demands of the film industry, but will eventually disappear as the industry shifts increasingly to launching cinema and DVD releases at the same time worldwide to counter piracy.

The lack of open standards is a shame because the set-top box is the key to the future of home entertainment - the gateway to our viewing, browsing and listening pleasure.

In the next few years we'll discover that the set-top box will be the hub through which all of the electronic content we indulge in - television, movies, digital radio stations, high-speed internet, telephony and gaming - is delivered to us.

It will have a built-in hard drive for recording content, an electronic programming guide, a high-speed internet connection and wireless transceiver (possibly wi-fi) for talking to your computer and TV or other appliances in other rooms.

But the key advance is that it will be open to all-comers - so that the same box can be used to receive content from any number of pay TV operators or internet providers who will compete fiercely to win your subscriber dollar. Ditching your pay TV operator will be as easy as switching smart cards and cancelling your old subscription.

This already happens to some extent in Europe and the US. Set-top boxes are fairly standard things these days. After all, they have to communicate with the same set of satellites and terrestrial towers and decode broadcast content in a routine way.

But pay TV services are still characterised by commercial arrangements that lock users into a single-supplier relationship. That's especially true of New Zealand, where we have only one major pay TV provider - Sky.

More than half a million New Zealand homes already boast a TV set-top box provided by Sky. The box receives Sky and Sky only. About 6000 people own a third-party set-top box that, via digital satellite, can pick up TV One, 2 and a promo channel showing World Cup rugby games.

Sky has not yet agreed to have its content received on boxes supplied by third parties. It encrypts its signal to protect that happening. It's a monopoly on supply that Sky jealously guards.

But with New Zealand in the midst of deciding its path to digital television and a range of satellite operators eyeing New Zealand, the time is ripe for an open box to hit the market.

It might be a box you can pick up in Dick Smith or Harvey Norman, and set up yourself - similar to Telecom's "Jetstream-in-a-box" where you install your broadband modem and the phone line filters yourself, or the new self-install wireless modems from Woosh.

The issue with pay TV operators such as Sky TV is that we as customers never gain ownership of the box that receives the content from the satellite. In effect we are merely renting it from Sky.

That arrangement is going to change. As the digital gateway to the home, the set-top box will be coveted like the stereo or the DVD player. Users will want ownership of it and to be able to take their box with them as they switch pay TV operator.

Sign up to Sky if you wish. But also have the choice of sticking to a few free-to-air, publicly digitally broadcast channels instead. Or, through the same box, hook up to Austar or whoever else feels it worthwhile in the future to swing a beam over New Zealand and take on Sky's pay TV monopoly.

Shin Satellite said last week it would offer broadcasters transponder space alongside bandwidth for high-speed internet access, video-conferencing and voice over internet protocol - calls that can by-pass Telecom's network. It will invest $15 million in New Zealand setting up an earth station.

With open set-top boxes capable of picking up Sky content, new Sky converts would have the option of buying a Sky decoder or a universal box ready to receive anyone open for business in the terrestrial or satellite broadcast, or internet space.

There is no shortage of set-top box vendors itching to get into this market. Now the case for an open, universal set-top box has to be pushed and Sky has to come along for the ride - with regulatory prodding if necessary.

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