Poor Microsoft reception for TV ‘interference’

Date: 15/04/04

BILL Gates' Microsoft will be back on familiar territory next week: warning EU policymakers not to make a costly mistake that would set back innovation and harm customers.

But this time, the issue is not the software giant's monopoly on the market. Instead, the company and its allies will try to convince the European Commission not to bow to pressure to tamper with market forces and issue a legal mandate for the technology behind the new wave of interactive digital TV technology.

The warning comes as Erkki Liikanen, the commissioner for enterprise and information society, prepares to decide this summer whether to impose a standard for the computer systems lurking inside the 'set-top boxes' that let viewers receive interactive TV systems.

The deadline for a decision on the smart new TV technology - which grants viewers greater control over programmes and gives access to vast amounts of information at the flick of a button - was stipulated in a raft of new EU telecom laws approved two years ago.

Ministers and MEPs said industry must make an effort to ensure their systems work together so that the future of TV is not undermined by industry infighting.

Proponents say insisting on a single standard for the so-called application programming interfaces, or APIs, would prevent the biggest TV companies from cornering the market for content - such as films, sitcoms or even sports events - by insisting it is tailored to work for their systems. That is because it costs a lot of money to adapt content to work on different systems.

At the same time, they argue, consumers would be able to receive many different TV services from the same type of set-top box.

An openly available system known as MHP, short for multimedia home system, developed by big name electronics companies including Philips, is the choice of many pro-standardizers, such as powerful German public broadcasters and MEPs from all parties in the country.

In a statement, German Christian Democrat MEP Ruth Hieronymi, Socialist Karin Junker and Liberal Astrid Thors said: "Mandating a single standard is not desirable, but it remains an option, in case the market does not satisfy consumer demands."

But Microsoft, which has developed an array of TV products, including its MediaCenter software, which can turn a PC into a home cinema, is part of a coalition of companies, including France's Canal+ and Rupert Murdoch's Sky, determined to quell the standards talk at a Brussels hearing next Tuesday (20 April).

"We don't think any standards should be mandated," said Jim Beveridge, Microsoft's European broadcast and broadband policy director, adding that such a move would "freeze technology".

Digital TV pioneers Sky and Canal+ claim Commission interference could undermine billions of euro of investments in systems.

Beveridge says talk of imposing standards ignores market developments - which mean pictures and video are now likely to appear in future in a host of technological systems - from mobile phones and PCs to digital assistants.

The Scot says it makes little sense imposing a standard for the technology used to receive just digital TV pictures - given the diversity of other platforms with different characteristics.

Instead, he says the focus should be on supporting efforts to at least ensure content providers have the tools to make certain that their programmes can be adapted to work on any technology.

The cross-industry Digital Video Broadcasting group, which helped develop the MHP system, has also worked on voluntary 'portable content format' standards to do just that. "If you know what type of content you have and you can signal it, it does not matter what you have on the receiver side," he explained.

To emphasize this, Beveridge points to the success of the iPod, marketed by rivals Apple to play standard music - not video - files downloaded from the internet.

"iPod doesn't have any open standards in it, but it does a fine job if you are a consumer.

"It competes with my [company's] technology... but you have to admire those [Apple] guys."

Commissioner Liikanen told European Voice earlier this month he is still making up his mind on the issue.

"We have not yet taken a decision on the need to mandate a particular standard to support interactive television services. A decision is not due until the end of July," he said. In the meantime, Beveridge is hopeful the Finnish commissioner and his aides will take on board his arguments - unlike when his company's CEO Steve Ballmer lost out to the Commission's competition chief Mario Monti in the anti-trust battle of the giants.

The European Commission is considering standardising the computer systems in the 'set top boxes' that allow viewers to receive interactive digital TV systems. Microsoft is part of a coalition of companies determined to squash the standards talk at a Brussels hearing on 20 April 2004.